Regency Mines makes further progress in US

Regency Mines announced further developments at its coal projects located in the Appalachian Basins of the eastern US on Thursday.

The AIM-traded firm said it had now invested $0.15m for a 20% shareholding in the new joint venture company Vali Carbon Corporation under the terms of the joint venture with UK Carbon Resolutions announced on 6 February, and was proceeding with the formal documentation which was now expected to be completed within the next two weeks.

UKCR identified a new metallurgical coal opportunity within the target Appalachian area which it secured and wass transferring into VCC.

The parties would continue to progress the project, Regency’s board said, and a further announcement would be made when formal documentation is completed.

Meanwhile, at the Rosa Mine in Alabama held by Carbon Minerals Corporation - a company 20% owned by Regency - contract washing of coal at the 125 ton-per-hour preparation plant was continuing as scheduled.

Mining of coal with the highwall miner on site was set to start shortly, the board said, and third party deliveries of mined coal were expected to start before the end of March.

“The political and economic background for metallurgical coal remains almost entirely favourable, and we welcome President Trump's plans for $1trn of much-needed investment in America's public infrastructure,” said Regency chairman Andrew Bell.

“As coal continues its recovery from extreme cyclical lows, interest is returning to the sector, and we aim with our partners to establish an early footprint that will have a quality and scale difficult to replicate as the recovery consolidates.”

Bell said the board had identified with its partners a number of opportunities to ramp up production and diversify its sources of saleable coal.

“The immediate priority now that Rosa has become cash flow neutral-to-positive is to accelerate cash flow generation, both by moving from contract washing to mined coal sales at Rosa, and by working towards early production through strip mining of permitted areas at the VCC project.”