20th May 2015 10:17
LONDON (Alliance News) - Regency Mines PLC Wednesday said it has reached agreements with the holders of adjacent nickel tenements to the company's Munglinup tenements in Western Australia to consolidate the area and develop it together.
Back in November 2014, Regency said the new owners of the Halberts graphite property, formerly owned by Graphite Australia Pty Ltd, had expressed interest in working with Regency to develop the asset. The agreements have been signed with Gold Terrace Pty Ltd and "other parties" which have not been named.
"These agreements will enable development of the neighbouring Halberts property, formerly a mine producing high quality graphite, to proceed," said the company.
"The conclusion of the Graphite Australia Pty liquidation process allows us to exchange our interests in the area for an interest in a project whose management has a record of successfully bringing mines into production," said Chairman Andrew Bell.
Under the agreements announced on Wednesday, Regency will surrender its interest in the Munglinup tenements to Gold Terrace, which in turn will issue Regency with 3.0 million shares in a joint venture vehicle worth around AUD200,000. If this is not completed within 12 months, Gold Terrace will pay Regency AUD200,000 in cash.
Regency said the carrying value of the tenements it is giving up is around equal to the AUD200,000 valuation of disposing of the tenements to Gold Terrace.
"This is an established quality deposit with a mining history and an existing mining license. There is a good chance that this will grow to be a valuable asset," added Bell.
Regency shares were up 4.2% to 0.0834 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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