The Regency Mines RNS today (see here) highlighted two significant developments:
1. Rosa – mine permits in place and production has commenced with a weekly revenue stream.
2. Vali Carbon Corporation – 50,000 tpm offtake contract being negotiated.
The following graphic indicates that based on Vali Carbon Corporation alone the revenue for RGM will be a minimum of £9.3m per year and if output reaches 100,000 tpm £18.6m.
These revenue figures take no account of:
- Rosa – year 2 production expected to be 120,000 tpm = revenue of £22.32m/year.
- Rosa – Highwaller production could reach 600,000 tpm = revenue of £111.6m/ year. Being conservative and assume only 50% efficient = £55.8m
- Washed coal revenue of $8 / ton
- Other coal opportunities indicated in the above graphic.
- Regency Mines interests in Motzfeldt, Horse Hill, Mambae and Curzon Energy.
Based on information in the public domain you have to question how the market cap of the business can remain c£5m for much longer.
What will be the catalyst resulting in a share price rerate?
Will it be?
1. The 50,000 tpm offtake contract currently being negotiated being announced to the market.
2. Market realising the implications of the revenue streams and significant under valuation of the business.
3. Announcements from the company regarding their other investment interests.