Regency Mines (LSE:RGM) provided investors with an update on operations at its Mambare project in Papau New Guinea this morning. The company has a 50% interest in the Nickel and Cobalt deposit alongside its Joint Venture (JV) partner, Direct Nickel (Projects) Ltd.

The parties have agreed that Regency will act as the information and reporting hub of the JV, will be responsible for the initiation of draft budgets and work programmes. All decisions on budgets, personnel, programmes, strategy and finance will be taken jointly.

 Regency has submitted a work plan for the next two years to the mining authorities. The work plan provides for an early extension of the ground penetrating radar coverage to include the bulk of the plateau. The company states that this initial programme will be relatively inexpensive and opens up the possibility of increasing the Mineral Resource Estimate.

Work undertaken by the Company to date indicates a likely continuity of mineralisation across the plateau surface, which ultimately may be demonstrated by further exploration and drilling.  Regency does, however, point out that the magnitude of the existing JORC compliant Resource is such that additional drilling to demonstrate a yet larger resource is not an immediate requirement.

A license renewal has been recommended for approval by the Mining Advisory Council and now awaits ministerial signature. Regency also reports it has received interest from third parties wishing to co-operate on the development of the project 

Andrew Bell, Chairman of Regency Mines commented: "The Mambare project joint venture we have always considered a remarkable opportunity for Regency Mines and the anticipated renewal of the exploration licence for two years occurs at a key point in the mineral cycle where interest in nickel and cobalt is increasing enables us to plan strategically.

Representatives of the joint venture including partner representatives are currently on site in Papua New Guinea as part of the planning process for the work programme, a\nd are also looking into the possible economics of a direct shipping ore operation.

We welcome the agreement reached with our JV partner. We had conveyed concerns relating to changes in their structure and how their share of expenditure would be funded. The new arrangements allay these concerns, we welcome their new commitment, and now we will address the issues of future funding and exploration co-operatively, to the great benefit of both parties.

This is a relief and a step forward for us and puts the Joint Venture in a position to raise its profile and increase its activity level at the Mambare-Botue Nickel-Cobalt Project at just the right moment”

Author: Stuart Langelaan

Disclosure: The author does not own shares in the company mentioned above.