Regency Mines has taken two distinct steps into the oil and gas arena with the participation at Horse Hill in Surrey and as announced today, with an involvement in a West Virginian oil play. This does raise an interesting question as to whether this is more diversification or a shift into the oil and gas business. So we put this and a few other questions to Andrew Bell, Chairman. We trust this information assists your research and assessment of the value proposition offered by the company.


MM: Regency Mines has a history in precious and base metals. So what us the rationale for the move towards oil and gas?

AB: It began with Alba. Alba needed to find a new role - and we needed as a shareholder to see a return there. Oil deals were attracting more market interest - this one at HH really attracted us. So when Alba went in - and was only able to afford a small participation - we backed it up with an investment direct, making our joint holding of 10% in HHDL equivalent to the other units of investment by Solo, Doriemus, Stellar. That took us towards oil: especially as the prognosis for HH began to look very encouraging. We have been looking at oil since in 2013 RSL, in which RGM's investee company RRR had a controlling stake, looked at a Texas oil project and we did the DD. The W Virginia project we see as quite low risk and steady return. It gets us in to the market in a stable and controlled way so as an apprenticeship will serve: it complements HH in terms of risk profile. As to our oil background: my first job was as, principally, an oil analyst studying all the deals in the N Sea as they arose. So that goes back some way. Scott is a Texan and has many oil industry connections, and we have spent a lot of effort this year in reviewing a great number of transactions. Our method is very conservative and risk-reward oriented.


MM: First there came Horse Hill and now West Virginia. At the crux what drove your interest in this US project?

AB: Each well is cheap, we have proprietary data available, the area is not one where prices have been driven up by too much competition yet, we have good partners, and we believe we can be modestly cash-flow generative as we proceed from an early stage.


MM: Are Horse Hill and West Virginia interest acquisitions the start of a trend for Regency?

AB: Major success in any field or any area of our business could transform us. Who sees the stars when the sun comes out? If we could predict, we would.


MM: With the dramatic interest in Horse Hill the market seems to have quietly forgotten the rest of the business assets. Can you briefly remind us what excites you about the rest of the Regency portfolio?

AB: Nickel is back in focus, and PNG getting increasing attention as first Indonesia and now perhaps the Philippines restrict untreated ore export. DNi is in active discussions on a first plant, and these have been going well. Our Fraser Range tenements, now in Ram Resources, continue to be a focus in the most exciting exploration area in Australia, and Ram is doing very well. The agromins exploration in Sudan has achieved a couple of near-breakthroughs so our optimism is high. At a time when many minerals are seeing depressed prices and pessimism, we are in areas that are suddenly all looking good.