Regency Mines has a significant coal mining interests in the United States. The Rosa coal prospect is metallurgical grade coal used for the production of steel. Below is an abstract from a recent analyst note (see here) regarding Regency Mines coal interests.
The price of metallurgical coal has been rising steadily since 2016.
We now have Trump putting significant tariffs on steel imports (see here). These tariffs for steel can be up to 25%.
What will the impact be on the value of Regency Mines metallurgical coal interests located in the United States? It would be reasonable to assume steel production in the States will increase, increasing the demand for Met coal driving up the cost of Met coal.
Regency Mines in the analyst note they commissioned, stated they expected early profits to come from their Met coal interests.
With the Trump news yesterday you would expect this to be a significant catalyst to:
a) remove barriers, preventing early production of Met coal from happening.
b) increase the early profits RGM are expecting from their coal interests.
It looks like the long awaited returns from Regency Mines coal interests are about to materialise. Trump is turning Regency Mines American coal interests into a ‘gold mine’.
Disclosure: This blog is the work of Sunil Mark-Singh (Silky). Sunil holds Regency Mines shares.
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.
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.
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.