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Regency Mines expects groundwork to reap benefits in 2013

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Regency Mines (LON:RGM) said it expects the benefit of the money spent in 2012 to start to show through in 2013.

The group slipped to a pre-tax loss of £2.1mln in the year to June, from a profit of £1.84mln last year, due to a deficit at associate Red Rock Resources (LON:RRR).

Andrew Bell, Regency’s chief executive, said: “2013 will be the year when we reap, we believe, some of the benefits from earlier expenditure.“

He said that without further spending by Regency, there should be results from the Direct Nickel pilot plant; RAM Resources will explore with funds raised from third parties and partners should come in to help develop its graphite resources.

Regency has a 7.5% stake in nickel processing firm Direct Nickel, while the two are partners at the Mambare prospect in Papua New Guinea where last year it established a resource estimate of 162.5 million tons at 0.94% nickel and 0.09% cobalt.

Direct Nickel has now announced the first ore charge and first slurry of material at its pilot plant as it begins operations. As this plant moves into hot commissioning and testing, Regency expects to receive a succession of result announcements in 2013.

Bell said everything recently has also gone its way at its Fraser Range acreage in western Australia.

Only last Friday, Sirius Resources announced a new nickel-copper target on the edge of one of Regency’s tenements.

Bell said the significance is that its acreage is now "slap bang" in the heart of the most prospective exploration currently in Australia.

The target Sirius found points towards Regency’s tenements and Bell says there couldn’t be a better background than having Sirius and the biggest base metal discovery for a generation “pretty much next door” with two sides in common.

Bell admits Regency has “got lucky” at Fraser Range. “We have to work hard to make sure we exploit this opportunity and don’t waste it,” he added

Regency has agreed a deal that ultimately could see sell 80% of its stake in the tenements to RAM Resources in exchange for a 50% stake in that company.

On Friday, Regency Mines also exercised its agromineral option in Sudan and Bell expects to see plenty of interest from other parties as the project develops.

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