Category Archives: Regency Mines

Is Regency Mines a steel at this price? #RGM

Disclosure: This blog is the work of Sunil Mark-Singh (Silky). Sunil holds Regency Mines shares.

Overview:

Regency Mines Plc are a small cap resource exploration company creating value mthrough strategic investments and project development at bottom of the global commodities cycle.

Continue reading

Advertisements

Regency Mines #RGM update due.

The current Regency mines market cap of £3.5m has no relation to the assets of the business.

Regency have a diverse portfolio of assets covering different commodities and jurisdictions. A portfolio that offers significant opportunities and manages the potential risks associated with businesses that have one business in one area.

The following graphic indicates the diverse nature of the business, its potential and the minimum expected revenue.

2FDD53BE-D74A-43E0-A353-1DA8E10B4107

The slight delays to the coal projects are just that. A much larger deal is anticipated from that previously envisaged.

We know Legacy Hill have been carrying out due diligence. We will soon know the partners involved in the bigger project deal.

Rumours are circulating that a large coal deal is about to be announced. Longterm Regency shareholders await the news with anticipation.

The share price will react on the coal news and the bashers of the stock  will disappear into the either.

We then have the following news coming:

1. Conclusion of the deal from the HHL shares sale to Alba.

2. Mambare Nickel/Cobalt News.

3. Motzfeldt news.

Regency Mines market cap will then IMHO be much higher than the current £3.5m.

 

#RGM Metallurgical coal

The market for metallurgical coal in the United States is increasing predominantly because it is required for steel production.

The following table indicates some key reasons as to why the price of steel is increasing.

IMG_1727

 

With the positives around steel it is hardly surprising we are getting coal companies announcements such as:

  • Contura Energy are in the middle of a $162m IPO (see here).
  • Warrior Coal have record income of $129.9m in Q2 2017. Warrior’s highly successful second quarter validates their value proposition as the only publicly traded ‘pure-play’ hard coking (metallurgical) coal operator in the U.S. (see here).

U.S Coal global research firm IHS Markit also pointed out that metallurgical coal revival isn’t just dependant on Trump infrastructure projects.

Probably the single biggest driver of the surge in exports is that there is international demand for U.S. metallurgical coal right now. “That is a function of the market rather than the political environment.”

Regency Mining are well placed when production commences to deliver much needed metallurgical coal.

It would appear the recent RGM RNS indicating coal projects are not now going to be progressed piecemeal but the ‘big picture’ route taken is based on some solid foundations..

#RGM Diverse portfolio

The current Regency mines market cap has no relation to the assets of the business.

Regency have a diverse portfolio of assets covering different commodities and jurisdictions.  A portfolio that offers significant opportunities and manages the potential risks associated with businesses that have one product in one area.

The following graphic indicates the diverse nature of the business, its potential and the minimum expected revenue.

IMG_1705

Follow this link for a better quality graphic. REGENCY MINES

It is interesting that the latest RNS provided no new information but the share price dipped.

All the information in the RNS had been deduced by those carrying out research into the business. The case for investment hasn’t changed.

The slight delays to the coal projects are just that, a slight delay. The share price will react accordingly in the near future.

#RGM – Will the doors be blown off?

Regency Mine news is well over due. The news regarding the Rosa coal mine when it arrives will ‘blow the doors off’.

Zac Mir, renowned charting analyst in his last update, on the 21st July said;

Indeed, with the 200 day line still rising even after the retracement of recent months one would be happy currently to err on the side of a sizeable rebound.”

The following table indicates the percentage change to the 200 day moving average.

IMG_1678

This is a link to Zac’s article.

IMG_1676

Chartists are taking their positions. It is noticeable over the last week that a significant increase has happened with regard to the number of tweets regarding Regency Mines.

Investing based on analysis of the technicals can become a self fulfilling prophesy.

In the case of Regency Mines however we also have the following events or news that could drop at anytime.

1. Market realising the implications of the revenue streams and significant under valuation of the business? Follow this link for additional information.

2. Announcement about Rosa – production or management team.

3. Announcement regarding Horse Hill. UKOG investment now valued at £750k+.

4. Curzon announcement.

5. Motzfeldt announcement.

Investors following the charts or news from RGM could be the catalyst for a share price rerate. Any small increase in buying pressure should move the sp to a new much higher base level.

The  “doors will be blown off” it’s  just a matter of when.

Is Regency Mines #RGM share price a joke?

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.

IMG_1566

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 t/yr = 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  and Curzon Energy.

 

Regency have recently raised significant funds, so finance isn’t an issue. We also are expecting news regarding Horse Hill, providing additional capital.

Regency have 3.35% of Horse Hill as indicated in the following graphic.

IMG_1567

Based on information in the public domain you have to question how the market cap of the business can remain c£3.5m for much longer.

What will be the catalyst resulting in a share price re-rate?

Will it be?

1.  Market realising the implications of the revenue streams and significant under valuation of the business?

2. Announcement about Rosa – production or management team.

3. Announcement regarding Horse Hill.

4. Curzon announcement.

5. Motzfeldt announcement.

It is clear without any announcements regarding the above five points the share price at its current level of 0.55p offers significant upside.

The imminent revenue streams and share price have no correlation.

Obviously the Chairman believes great upside as he has twice in recent months bought shares on the open market at above 1p a share.

This share will re-rate very quickly on news or when investors realise the revenue that is as good as guaranteed with plant on site, permits in place and off take agreements signed.

Is the share price at the minute a joke or is the lack of communication from the business deliberate?

Could it be Regency aren’t keeping investors informed whilst they assist  somebody to obtain shares with a low entry price?

Whatever is happening it’s a great opportunity for private investors.

#RGM cheap production of expensive coals

Regency issue newsletter highlighting their plans for coal production (see here).

IMG_1441

Some of the key highlights:

  • Regency focusing on ‘cheap production of expensive coals
  • Focusing on metallurgical coal rather than dirty coal. Required for steel production.
  • Rosa announced coal reserve of 453,000 tons is very low as:
    • Based on 300′ auger rather than 1200′ Highwaller mining.
    • more coal identified
  • Val has 100,000 tons/month production target
  • production / revenue stream imminent.
  • RGM have first mover advantage.
  • Rosa coal at $130/t = $4.5m net attributable profit.

As news is released the share price will react accordingly. It is clear from the newsletter that further information is going to be released to the market.

The business is aware figures released to the market are conservative. We await the revised NI 43 101 report and also for RGM to release actual coal outputs. The market will then realise the business is undervalued.