Category Archives: Regency Mines

#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.

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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..

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#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.

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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.

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This is a link to Zac’s article.

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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.

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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).

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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.

 

 

 

 

#RGM potential revenue £9.3m to £55m+?

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.

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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_1418

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.

#RGM an investment opportunity?

Regency Mines in January  completed its acquisition of a 20% shareholding in Carbon Minerals Corporation (“CMC”).

This acquisition is significant as CMC own the Rosa coal mine in the United States and is going to provide near term revenue.

This has the potential to be a major revenue stream for RGM with significant coal outputs.

The  last brokers note from Dowgate (see here) doesn’t mention the Rosa mine, as deal hadn’t happened at that time and gave a share price target without this asset of 31.8p.

The last but one presentation from Regency (see here) makes a small reference to the Rosa mine with this graphic.img_1249

This asset is under the radar for many potential investors when in fact it is a major revenue stream.

The following figures are from Share Talk (Steve’s Shares – see here).

The figures for production of coal at 2000 tonnes per day and at $100 margin per tonne (30% lower that current coal values) are $200,000 per day and RGM has a 20% deal in place. So changing into GBP that equates to around £32500 profit to RGM per day.

Assuming production around 200 days per year that is £7.5M plus per year income for RGM.

This table is from the latest presentation on the Regency website giving their thoughts of the potential revenue.

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When the current market cap of RGM is c£2m it makes you wonder when the market will realise this stock is undervalued.

These figures are based on the Rosa mine alone. RGM have significant other assets as indicated in their presentation, such as an oil asset in Horsehill.

What will an updated brokers note from Dowgate state when it’s issued and includes the Rosa revenue?

RGM have also stated that they have received additional enquiries for their coal output since Trump elected president of the United States.

RGM share price is looking likely to re-rate in the very near future.

I have over the last few weeks built a position paying circa 0.4p a share and like many, will now hold tight awaiting any share price uplift.