1

Value Proposition

Date September 2012

Price 1.2p

Market Cap £9m

Code RGM

Listing AIM

Shares in issue 751m

“The idea behind an asymmetric payoff is such that if you were to lose your bet, your loss would be limited to the size of your stake, but if you win, your gain will be a high multiple of it” Contrarian Investors Journal

Regency Mines operates as a Base Metals Explorer and a Mining Finance & Technology Investment house. It consists of these three major divisions and focuses on diversification, finding projects of significant scale, and on identification and realisation of value in the mining sector via transactions.

Regency Mines (RGM)’s executive team is headed by noted dealmaker Andrew Bell, formerly both a mining analyst and an investment banker but latterly Chairman and CEO of both RGM and its associate Red Rock Resources (AIM:RRR). He is also non-executive Chairman of Greatland Gold and Resource Star (ASX:RSL) and a Director of Jupiter Mines (ASX:JMS).

Hitherto, RGM has gained strength from a number of significant corporate deals, leveraging management’s contacts and ability to raise capital in the London markets. In particular, spinning Red Rock Resources out of RGM and then investing (via Red Rock) in Jupiter Mines, created significant value for shareholders and showed the value creation potential of deal making in the sector. The RGM business model involves identifying prospects with good size potential, prospecting and developing, then making deals with third parties to extract the value created by these activities.

September 2012

Introduction

Overview

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IntroductionRGM has three divisions as previously noted: Nickel Laterites, Mineral Exploration, and Mining Finance & Technology. The Nickel Laterite division covers the biggest and probably the best known of RGM’s operations; the Mambare nickel project in Papua New Guinea. The Mineral Exploration division is focused on a number of base and precious metal tenements in Australia and is currently reviewing an opportunity in the Sudan, all searching for mineral commodities where future economic projections indicate value might be realized. The Finance & Technology arm covers investments in other ventures both listed and private with the highlight being a new Nickel technology being developed by RGM’s partners, Direct Nickel (DNi).

Regular readers will know that MiningMaven looks for security and blue-sky upside. We believe that in this case the security is provided by the Mambare nickel laterite deposit and listed investments worth close to a third of RGMs market capitalisation. The blue-sky comes from the huge potential long-term upside in the Mambare project, from the potential of the Direct Nickel technology, from the deal-making skills of the principals, and from the upside in the listed Red Rock Resources shares and the potential value in certain of the Australian projects, in particular the titanium, graphite and copper exploration tenements - and a rather large agrominerals project in Sudan (currently subject to due diligence).

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• At Mambare in Papua New Guinea, RGM owns 50% of one of the world’s largest proven nickel laterite deposits, with a JORC compliant contained nickel resource of 1.5 million tons – a gross contained value of around $25bn;

• With only 3% of the plateau drilled to date Mambare could eventually turn out to be the world’s largest nickel laterite deposit, although the company is currently assessing its options on how best to progress the project using its own resources;

• The other 50% of Mambare is currently owned by Direct Nickel, the owners of a patented low-cost nickel-from-laterite extraction process. Should Direct Nickel not meet its share of funding as the project progresses, which due to their delayed listing is a possibility, RGM’s share may increase;

• Potential eventual multi-decade cash-flows from Mambare dwarf RGM’s existing market capitalisation. At an estimated independently calculated opex of $1.83/lb. (DNi process) plus rule-of-thumb mining costs and a long-term nickel market price of $17,000/t the gross margin from an initial 5,000tpa plant is in excess of $30m per year. Such a plant is modular and additional production lines could be added to exploit the size potential of the resource;

• The market value of RGM represents a value of the resources in the ground at Mambare of $0.005/lb. (0.5c/lb.) against a nickel price of over $7/lb. Once either the DNi process or a more traditional one is proven to economically extract the nickel we believe it would be logical to expect the in-the-ground value to increase to a multiple of this with a consequent increase in share price;

• RGM owns around 15.5% of Red Rock Resources (AIM: RRR), market capitalisation c£17m, of which Andrew Bell is also executive chairman. The RGM stake in RRR is worth c£2.6m;

• RGM owns 11.02% of Oracle Coalfields (AIM: ORCP) which is developing Block VI of the Thar Coalfield, Sindh Province, in Pakistan. The market value of the shares is c£600k;

• RGM has a number of interesting exploration stage projects in Australia and PNG. These are of sufficient size that any discoveries would potentially be material to the company market capitalisation.

Value Proposition

LatestMambare Nickel

• A revised JORC compliant resource estimate, with a 67% increase in contained metal compared to the previous estimate, was released on 13th June. The JORC resource is now 162.5Mt grading 0.94% nickel and 0.09% cobalt, giving a total of 1.53Mt of contained nickel. The cut-off grade is 0.60%;

• Wet-commissioning of the DNi test plant in Perth, Australia is believed to be under way. This will initially produce an intermediate cobalt-nickel –iron mix) product but by the completion of the testwork, DNi will be running the full flowsheet to produce a saleable nickel-cobalt mixed hydroxide product. Following recent resolution of some funding issues by DNi, testing of a large scale sample from a project in Indonesia is understood to be about to begin on a 90-day program which will test all the key innovative steps including reagent recycling;

• RGM has commissioned a Value Engineering study on the Mambare project. The aim is to review in detail the value, risks and uncertainties of the various development options so as to direct future time and money to areas where benefit and value is most likely to accrue. The study should be completed by Q3 2012, and should provide the firm with the information and analysis required to progress the project in a cost-effective manner with a view towards maximizing the value creation amidst challenging market conditions;

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LatestMambare Nickel

• Delays in execution with DNi’s fundraising were in danger of creating knock-on problems for RGM, who already met the DNi share of costs in the later stages of the exploration/Resource calculation programme of 2011-2012. Delays which were beyond RGM’s control were causing share price damage, as without funds, the piloting processes could not take place and the progression of Mambare towards production was seen by many investors as dependent on the DNi technology. However, DNi has made substantial steps recently in resolving its funding issues. Also, given the unexpectedly large scale of the 162Mt Resource declared at Mambare this year, a number of processing options can be seen as potentially viable. There are several other processes for treating nickel laterites operational worldwide and RGM intends to test other process routes while DNi progresses its own test program. The twin aims would be (i) to eliminate the market perception that RGM is completely reliant on DNi with its consequent impact on RGM’s share price and (ii) to keep the Mambare project moving forward under whatever processing technology proves most viable;

• The recent start of production at the China-Highlands Pacific Ramu project in PNG, using conventional HPAL processing at significantly lower grades than Mambare is expected to be capable of, is an important comparator providing proof of concept.

Other• On 4th July 2012 RGM took out an option

on properties in the Sudan with conceptual exploration targets totalling almost 4bn tons of phosphate (P

2O

5) with grades of up to 20% as

well as potash and gypsum. In the future RGM could raise its stake to 51% by establishing two JORC mineral resources and paying a total of $3m in several stages to the vendors. The initial entry and exploration would be cheap and quality phosphate deposits are highly sought after around the world. Given the potential scale of this project, the stage in which the project currently sits and RGM’s current market capitalisation, it would make sense for the company to be keeping its eye on how best to quickly and cheaply add value and then monetise all or part of the investment. This could be an opportunistic acquisition of a major project at a low point in the market, showcasing RGM’s deal making capabilities, ability to position itself at the low cost early exploration end of the production cycle and explore successfully. RGM believes it is its mission to find value in challenging market conditions, and that these agrominerals have several identified potential bidders a year down the track; which makes them more liquid than Mambare. Investment ultimately depends on a successful due diligence process which is now underway;

• At RGM’s Pyramid Lake JV recent drilling has returned titanium intercepts in the 2.5%-3.75% range from the first 7 holes assayed (aircore drilled): this looks likely to be in the form of ilmenite (Iron titanium oxide); further assays and a full analysis of the rock content are imminently awaited.

RGM has Mambare and a number of interesting exploration projects in Australia, but these early stage projects are funded with a strictly limited budget.

With no consistent sources of revenue and given the current challenging environment for fundraising, RGM has cut non-essential spending. It is carrying out a value engineering study on Mambare, to optimise future spend, and reducing exploration expenditure on its Australian tenements to a number of small scale pieces of carefully considered work designed to cost around $20,000 each with the aim of delivering maximum ‘bang for the buck’. This involves limiting expensive drilling and focusing on preparatory geological studies as much as possible, in particular using Mobile Metal Ion (MMI) technology developed by SGS, a method which RGM believe gives more information than conventional soil sampling at modest cost.

Operations overview

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Mambare Nickel Project

• RGMs principle development asset is the Mambare Nickel Project in Papua New Guinea;

• The Mambare deposit is 100% owned by Oro Nickel, in which RGM has a 50% stake;

• The remaining 50% of Oro Nickel is owned by Direct Nickel (DNi), an Australian technology company with a patented nickel laterite processing methodology;

• RGM also owns 8.68% of DNi directly.

Projects

About Mambare• The Mambare tenement (EL1390) includes a

plateau and the slopes leading up to it, totalling about 20km by between 5 and 7km. Of note, Mambare is about 120km of mostly sealed road from the deep water port at Oro Bay.;

• It has a JORC resource of 162.5Mt grading 0.94% nickel and 0.09% cobalt, giving a total of 1.53Mt of contained nickel. The cut-off grade is 0.60%. These grades are normal for nickel laterite deposits.;

• Within this total, there is a very significant section of higher grade material of 47Mt at 1.23% nickel and 0.08% cobalt with a cut-off grade of 1.00% nickel. This is likely to be the first mined section to give a beneficial early cashflow and will have a positive impact on the overall project economics and value creation potential;

• 98% of the tonnage is Inferred, with some 2% classed as Indicated. Bankable Feasibility Studies may require resources drilled out to Proven status, so some future drilling would likely be necessary before funds are raised to build a plant in 2014/15/16;

• The drilling completed in both the 2008 and 2011 drill areas shows that the laterite mineralisation appears to consistently blanket the underlying ultramafic bedrock, where not eroded by local drainage. The same ultramafic bedrock extends across the whole tenement area. Given the current resource lies mostly on the steeper and more eroded slopes below the plateau, RGM expects to find similar or better continuity of mineralisation in future drilling across the plateau surface;

• The current resource places Mambare in the top dozen largest nickel laterite deposits in the world by contained metal. Only 3% of the plateau has been drilled to date: so the potential for expansion and real “blue sky” is very clear;

• Ultimately, Mambare has the potential to be the largest nickel laterite deposit in the world. However, proving this in the short term would require significantly more drilling, which would not deliver any immediate economic benefit, so the resource will remain the size it is for the present, which is more than ample for the needs of foreseeable production.

Mambare Plateau

EL1390

Kokoda Township

8.68%

50% 50%

100%

Mambare

Mambare

Port Moresby

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Projects

About Nickel Laterites

Most of the nickel the world uses comes from nickel sulphide deposits due primarily to the high value of the associated by-product credits, such as at Norilsk, Russia. However, these are becoming scarcer, and development is turning to the more common nickel laterites (77% of known reserves are in laterites but they represent only 44% of production).

Producing nickel from laterite deposits is not easy. The proven High Pressure Acid Leach (HPAL) method is capital intensive, will not treat the very common iron-rich laterite (limonite) and has had some spectacular failures, notably at BHPs Ravensthorpe deposit in Australia where BHP drilled the deposit, built the plant (reportedly for $2.2bn) and could not deliver production. It was eventually closed, sold, and only recently became truly operational.

Hence the development of a number of different tanks leach processes, including the DNi process. MiningMaven cannot find evidence that any of the tank leach processes are yet in commercial production anywhere in the world.

Nickel Laterite Resources Indicated & Inferred(Ex. Kalgoorlie and Halmahera)

Potential to increase resource size and contained nickel from the undrilled 97% of the tenement

Mambare June 2012

Mambare April 2012

Wood Mackenzie/RGM/ MiningMaven 2012

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About Direct Nickel (DNi)

• The attraction to RGM of forming a partnership with DNi was its patented revolutionary process for tank leaching of nickel laterites;

• DNi have another partner in Indonesia (PT Direct Nickel), and the initial plant-scale testing of lateritic ore will be using 150t of ore from their deposit. This works well for RGM as the logistical difficulties of producing 100-150t from Mambare are significant, and by waiting for the Indonesian testwork RGM will likely need a much smaller sample (25-40Mt?) and testing will be quicker. Additionally, RGM have confidence in the knowledge that to date in limited laboratory tests the Mambare ore samples tested showed very good performance with the DNi process. The PT DNi ore is expected to arrive in Perth this summer. Testing is expected to be completed (subject to funding) during 2013. Subsequent testing of a bulk sample from Mambare will build on the prior experience and should therefore be much quicker and cheaper;

• DNi has agreed a reverse takeover of an ASX listed shell company, Wintech (ASX: WTG), but has resisted until now raising the working capital (low single-digit millions) that it requires to relist Wintech (and change its name to DNi) on terms that it would see as over-dilutive. This is both a symptom of the current state of world markets for resources stocks in general and resource technology stocks in particular. It would appear to us that with the general fall in resource company stock market valuations, in order to get its fundraising completed, DNi may now be ready to accept a lower valuation in order to gain access to capital markets.

Projects

• It can treat all laterites (both limonite, saprolite and transition) through the same flowsheet, unlike any other process under development;

• It uses nitric acid instead of the conventional sulphuric acid;

• It recycles 95% of the acid, which is a key step in reducing the costs;

• It is scalable: the process can be started in a relatively small way and extra tank lines added as cash permits and resource economics permits;

• In preliminary lab tests using the DNi process, over 90% of contained nickel was recovered in under 5 hours;

• It works at atmospheric pressure;

• It uses standard stainless steel components;

• It produces an industry standard mixed hydroxide product containing around 40% nickel;

• The capex and opex have been independently calculated to be very significantly smaller than typical conventional processing (Capex: Conventional $35/lb. of annual capacity, DNi $12.50/lb.; Opex: conventional $8.00/lb., DNi $1.83/lb. Source: Aker

Solutions, now Jacobs Engineering)

Key value-creation factors in the process:

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ProjectsNext steps

Developing Mambare is all about cash and process proving.

The DNi process when applied to nickel laterites has so far only been proven in small scale equipment. It will therefore be necessary to prove to potential funders that the process will work when transferred to large scale plant.

DNi is building a test plant in Perth, WA. Construction of Stage 1 has been completed. This will produce an intermediate product (a cobalt-nickel-iron mix); when Stage 2 is implemented the full flowsheet will be tested to produce a saleable nickel-cobalt mixed hydroxide product. Completion of the build for Stage 2 was subject to DNi raising funds, a process which now appears to be reaching a conclusion. It is hoped that the process will be proven in 2013 with Indonesian ore and then with Mambare ore. However, we understand that the Stage 1 process will prove all the innovative steps including reagent recycling: Stage 2 deals with Aluminium precipitation and (separately) Iron precipitation, both of which are (we understand) well-established processes without significant technical difficulty.

There have been delays in execution of DNi’s fundraising which threatened to create knock on problems for RGM. As explained above (under ‘Latest’) RGM intends to send samples for testing using other processes for treating nickel laterites in order to keep the Mambare project moving forward regardless of DNI’s performance. It also expects to receive the Value Engineering study in Q3 and intends to spend a small amount of money investigating the area’s geothermal energy potential.

The DNi pilot plant should commence in Q3 2012 and that should start to yield valuable information on the process straightaway.

As it stands, DNi does not appear to be in a position to continue funding its half of Oro Nickel to undertake any significant work at Mambare. Thankfully, there exists a shareholder agreement governing Oro Nickel which contains provisions for dilution of the respective shareholdings in the event of non-funding of ongoing expenditure. Ultimately, we would expect Oro Nickel to adopt whichever process it felt was most suitable for taking Mambare forward (which could of course still be the DNi process).

Then funds will need to be raised to build the production plant at Mambare – probably in the order of $200m for a 5,000t pa plant. Our assumption is that Oro Nickel will be floated on either AIM or the ASX and debt and equity funding will be raised through Oro. An alternative would be to bring in a cash-rich third party industry partner, probably from the Far East, before flotation to jumpstart Mambare’s progress. This route could limit dilution to RGM’s shareholders in a difficult market for fundraising and thus we expect both DNI and RGM to be jointly exploring these options.

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Australian Base and Precious Metal Projects

Exisiting Licenses

In 2011 a comprehensive Versatile Time Domain Electromagnetic (VTEM) survey and interpretation over 17 of its 20 tenements in Western Australia and Queensland was undertaken. This has enabled work planning for 2012.

Pyramid Lake: MMI (Mobile Metal Ion) sampling has been completed (810 samples from 30cm deep), followed by an aircore drill programme of 39 holes some reaching 110m depth plus reverse circulation drilling over 8 holes at up to 115m depth. The MMI is intended to pick up traces of metals which have migrated from depth to assist cheap and fast mapping of the possible underground strata. The aircore drilling tests the ground above the bedrock, whilst the more powerful reverse circulation drilling enters the bedrock to search for non-depleted sulphide zones. RGM is awaiting the results of beneficiation testwork and mineralogy on the titanium samples.

Munglinup Graphite Project: The VTEM survey has identified a 1.3km long zone of interest adjacent to a known past-producing resource area known as Halberts (1.3Mt @ 18.2% graphite, closed when the price fell in the 1980s). Samples have been taken and are undergoing analysis. Only ‘large flake’ graphite is truly valuable: but if it exists then it is pure graphite and not compounded with other elements, so the processing to liberate it is straightforward and relatively inexpensive.

Kambalda: A known gold producing area in which RGM holds 5 contiguous tenements. It is proposed to carry out an aircore drill programme of approximately 2000m in late 2012/early 2013, subject to budget priorities at the time. Gold cannot be picked up by VTEM but historical records studies

have indicated the presence of significant gold intercepts (4m@ 4.57g/t, 1m@ 14.6g/t) which

were never followed up with further drilling or geological interpretation. Kambalda

is also prospective for nickel.

Little Mt Isa/Halls Creek: The VTEM survey highlighted some strong anomalies. Further surface sampling work has revealed cover with 0.1% copper and zinc, as a result of which detailed soil surveys will be carried out later in 2012 or 2013. A $20,000 test programme will be sampling graphite and conducting a gridded soil sampling programme over a sulphidic gossan and other areas to identify any similarities with nearby VMS deposits. Results from these programmes are expected to be announced in the autumn.

Licences Base / Precious Metal

Pyramid Lake * Titanium/other sulphides/Gold

Munglinup* Graphite and Magnesite

* The above are all within the ‘Ravensthorpe Tenements’ in the map below

Kambalda Nickel Sulphides & Gold

Fraser Range Gold

Bundurra Copper & Gold

Kimberley Downs/ Ellendale North

Diamonds

Little Mt Isa/ Halls Creek

Base Metals

Projects

Bundarra

Munglinup / Ravensthorpe

Perth

Brisbane

Sydney

Melbourne

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Bundarra: Results from the VTEM showed a number of targets, of which four have been delineated for a diamond drilling programme and permits have been applied for. This is an area historically known for small copper mines; reputedly there were over 100 operating in 1908, and RGM staff have seen the remains of a 19th century smelter in the area. Hence there is potential for a modern operator with new prospecting techniques to discover a larger deposit. There has been work undertaken in the 1960s to 1980s by a number of companies in small areas, but RGM is the first operator to consolidate the whole area – it has a 260sq km tenement. RGM plans to drill a small number of holes next year to 170m depth to test its analysis of the geology. If proven correct it would hope to find a rich (2%+) deposit, but given the geographical spread of the old mines and the 20th century exploration results, uncertainty exists about likely ore continuity and deposit size.

Fraser Range: Recently applied for and awarded, this area lies 300km south-west of the Tropicana Gold deposit and along the boundary of the Yilgarn Craton. Much of the rest of the boundary is staked by AngloGold Ashanti. A potential gold anomaly exists under sand cover. When granted these tenements RGM intends to undertake a programme of Rotary Air Blast drilling when viable.

Kimberley Downs/Ellendale North: RGM has applied and been granted an exploration tenement covering Ellendale North. This tenement is situated within the Ellendale Diamond Field famous for production of yellow or ‘champagne’ diamonds. A producing diamond mine owned by Gem Diamonds (LSE:GEMD) is 17km to the south. Historical work has tested three volcanic pipes (lamproites) within the licence area where some diamonds were obtained. Some of this work has not been comprehensively detailed and RGM has applied to the authorities for records from 1979-80. On receipt of the records RGM will consider carrying out further work.

PNG licenses: RGM has licenses under application in good addresses adjacent to majors that are prospective for gold and base metals.

Projects

VTEM Survey

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RGM owns about 15.5% of Red Rock Resources (AIM: RRR) which was spun out of RGM in 2005. RRR in turn owns 74.2m shares in Jupiter Mines (ASX: JMS), a holding which is currently valued at about £8.6m, over half of RRRs market value. JMS plans to commence production of manganese from its Tshipi mine in South Africa in H2 2012. This would be expected to reflect as a rise in its currently depressed share price and in the value of RGM’s holding in RRR in the near future. There is also longer term upside in JMS from its iron ore developments in Australia, on which RRR has a gross revenue royalty as well. There is also ground in Kenya prospective for gold already containing a 1.2m ounce JORC resource, ground in Greenland delivering high quality iron samples. Red Rock is also part financed by an operating gold mine in Colombia for which Red Rock recently received a sale proposal (subject to due diligence and definitive agreement), for a Canadian buyer to acquire the Colombian mine’s wholly owned subsidiary, American Gold Mines Ltd, in which Red Rock holds a 50.5% interest.

Jupiter Mines, Greenland and Kenya have potentially very significant upside should future production, development and drilling go anywhere close to plan over the next months.

Oracle Coalfields (AIM:ORCP) is developing Block VI of the Thar Coalfield, Sindh Province, in Pakistan. This has a JORC-compliant 529Mt resource and 113Mt reserve, and has recently signed a Joint Development Agreement with the local power supply corporation to supply coal and water long-term to a new 300MW power station (potentially rising to 1100MW). In a country desperate for more electricity this is a major milestone in the development of the coalfield and should enable finance to be negotiated for the mine. However, the low level of the share price and the low (£5.4m) value of the company suggests that very significant dilution will take place when the funds are raised which limits the upside from the shares and makes estimation of the potential future value of RGM’s shareholding very speculative.

This has been a major past contributor to RGM’s profits. RGM has taken stakes in companies or assets, developed them, and then extracted profits where appropriate and moved on.

In a sense this is exactly the process envisaged by the purchase of a stake in DNi and the subsequent merging of Mambare into a vehicle half-owned by DNi. One option is to float both DNi and then Oro Nickel, raising cash to develop the Mambare deposit through the issuance of shares in Oro Nickel.

RGM Investments

Mining Finance & Technology

Holdings Market RGM Shares Price Value

Listed

RRR AIM 145,764,666 0.018 £2.6m

ORCP AIM 23,600,000 0.023 £542k

Alba AIM 31,384,047 0.0043 £131k

Greatland Gold AIM 1,500,000 0.007 £10,500

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FinancesNone of the RGM assets are yet at the production stage: there is as yet no revenue other than management charges to related companies.

RGM had £150k of cash at 31.12.11 and total net current liabilities of £1.1m (Click here for interims). On 9th February it issued £401k in equity and on 2nd July a further £807k in equity. There can be little doubt that cash is tight and will remain so until and unless DNi can obtain its funding and complete its reverse takeover to obtain an ASX listing and pay its share of Mambare’s development costs. At this time it would be hoped that the share price of RGM will rise based on the back of the massive new resource at Mambare and other positive developments include upside in Sudan and that further share issuances to fund the business can be made with more limited dilution.

There were £1.12m of short term borrowings and £0.7m of long term borrowings at 31.12.11.

Admin expenses amount to £550k-£600kpa: this is a realistically small minimum that RGM needs to keep ticking over, some of which comes via shared offices and staff with RRR. (See the Interim Accounts, Page 4)

Since it floated on AIM, RGM has had two principal sources of funds: profits from sales of shares in strategic investments and issues of new shares. It has an existing Standby Equity Distribution Arrangement (SEDA) with YA Global Investors incepted June 2011 for 3 years. Under this RGM can place up to £6m at a 2-5% discount. Some £5.8m of this facility remains undrawn.

The last reported year end was 30th June 2011. The audit report was completely clean with no qualifications of any sort.

Upcoming announcementsHistorically, RGM has put out progress announcements very regularly. Over the next few months there should be a steady stream of updates on the sampling and drill results from the various Australian tenements.

After the recent JORC resource statements and upgrades on Mambare, announcements in the short term are likely to be related to nickel laterite testwork, the results of the value engineering study on progressing Mambare, updates on due diligence efforts in Sudan, and any significant corporate developments.

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The current share price, although now significantly above its August lows, probably reflects both general market retrenchment in mining & exploration shares (AIM miners are down significantly in 2012 across the board) and the fact that Mambare production is several years away and may utilise an as yet unproven extraction process. Current pricing levels do not by any means reflect the size of the Mambare JORC resource or the near-certainty that the scale of Mambare will ultimately ensure that it will be developed by someone in the future.

We feel that considering other process flow-sheets beyond DNi’s makes a great deal of sense for RGM at this point: this offers another way forward and limits RGM’s dependency on DNi which has to date been fairly slow and funding constrained.

We also have confidence in Andrew Bell’s deal-making skills and track record to pilot RGM’s way forward through today’s very difficult markets, and we are also enthusiastic about the potential upside for the company’s other projects in Australia and, of late, the Sudanese agrominerals licenses currently undergoing due diligence.

One of the greatest appeals with exploration investments is that they can often behave rather like an “option” over the underlying commodity, delivering asymmetric returns on one’s investment. The risk will always lay in the company’s effective deployment of capital and cash management, and whether the anticipated payoff will genuinely be of sufficient magnitude to deliver those desired high-multiple returns.

In RGM’s case we consider this risk to be sturdily offset by the low share price. And in terms of the payback, the company has multiple potentially company making “Irons in the Fire”. Significant success with any of the company’s projects, we believe, could offer investors such an asymmetric upside.

For those with the nerve to stay the course, who are looking to buy a share close to its market bottom, RGM is definitely worthy of further investigation.

Disclosure: Regency Mines is a constituent of the Maven NR portfolio. Principals and members of the MiningMaven team hold shares in

Regency Mines.

Disclosure: Members of the MiningMaven Team hold shares in Regency Mines

Summary

Copyright © MiningMaven 2011.

All figures quoted have been obtained from the respective Company websites with links provided where available. Errors & omissions excepted.

This summary represents the views and opinions of MiningMaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation to buy shares in the company. All opinions expressed are those of the author/s and unless otherwise stated, should not be construed as being made on behalf of any featured Company. From time to time MiningMaven principals may take equity positions in companies. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

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