Additions to Agrominerals License Areas

RNS Number : 2875C

Regency Mines PLC

12 April 2013

 

REGENCY MINES PLC

ADDITIONS TO AGROMINERALS LICENSE AREAS

12 April 2013

Regency Mines plc, ("Regency" or "the Company"), the mining exploration and mineral investment company with interests in nickel and other minerals in Australia, Papua New Guinea and Pakistan is pleased to announce an update on its agromineral exploration in Sudan, a project where Regency has farm-in rights under  an option agreement with International Mineral Resources (Agrominerals Sudan) Ltd ("IMRAS").

·     Increased Red Sea concession by 600km2 in the North

·     Added 26,000km2 area to north of Jebel Abyed and dropped some less prospective zones

·     Strengthened working relationships with related parties

Revision of concession areas

Based on the results of geological desk-top studies by the Company of publicly available material and data from the Sudanese Ministry of Minerals, two significant additions  have been made to the original IMRAS exploration licences in Sudan. The review revealed further information relating to the most prospective geological environments for agromineral formation, leading to the extension and modification of two of IMRAS's original licence areas.

A 26,000sq km area to the north of the Abu Hashem licence, known as Jebel Abyad, has been granted to IMRAS by the Ministry of Minerals (Figure 1). At the same time the IMRAS holdings at Abu Hashem have been reduced following field trips and sampling by Regency geologists in 2012 and 2013. The area held has thus been shifted to focus further to the north within the same general region. The results of the desk-top study indicate that the region is underlain by sedimentary marine rocks, which form a suitable geological environment for phosphate deposition. The lithologies at Jebel Abyad are similar in age and geological environment to the prolific Mediterranean Phosphate Belt, a late Cretaceous-early Eocene trend of phosphate-rich marine formations extending from Morocco to Turkey. It contains 79% of the world's phosphate reserves and accounts for 30% of world annual phosphate production (Baioumy & Tada, 2005: USGS, 2012).

Potential geological correlations are also believed to exist between the Jebel Abyad sedimentary sequence and the Duwi Formation of Egypt, a phosphate-rich lithology with economic grades averaging 25% P₂O₅ (Baioumy & Tada, 2005; Baioumy et al. 2007). In order to identify phosphate occurrences in the area, Regency is currently developing a programme of work, consisting of geochemical sampling and geological mapping along 350km of transect lines.

FIGURE 1: MEDITERRANEAN PHOSPHATE BELT CORRELATION

http://www.rns-pdf.londonstockexchange.com/rns/2875C_-2013-4-12.pdf

Based on further research by Regency into the Red Sea licence area and its associated geology, a 600km² extension to the north of the original concession was granted by the Ministry of Minerals.  The 2012 due diligence field visit identified outcropping gypsum beds up to 1.5m in thickness. Additional studies of the Red Sea rifting event and assessment of historic borehole data has identified the presence of substantial evaporite sequences along the Sudanese Red Sea coastline. Two boreholes identified a 650m thick sequence of evaporites, known as the Dungunab formation and a 1,400m evaporite sequence, known as the Maghersum formation (Whiteman, 1971) respectively. Both formations are described as containing gypsum and potash. The sequences are considered by Regency to hold exploration value. Further exploration is required to confirm the presence of economic concentrations.

Further geological correlation south along the Red Sea rift system into Ethiopia indicates a potential association with the Danakil potash deposit, owned and operated by the Allana Potash Corporation, in 2013 they reported a measured and indicated reserve of 1297 Mt @ 19.3% KCl (www.allanapotash.com, 2013).

FIGURE 2: Red Sea Potash map

http://www.rns-pdf.londonstockexchange.com/rns/2875C_1-2013-4-12.pdf

Development of working relationship

The recent visits to Sudan have helped to strengthen the working relationship between the Regency/IMRAS partnership, Ministry of Minerals and Geological Research Authority of Sudan (GRAS). As part of these visits, Regency geologists began initial field instruction with junior geologists from the Ministry and both companies intend to develop this training as the exploration project advances. Regency and IMRAS are also working closely with the British Geological Survey (BGS) with the aim of adding the current BGS library holdings on Sudanese geology to the GRAS Library in Khartoum.

In December 2012, senior geologists and key members of the Sudanese Ministry of Minerals visited the Regency offices in London to meet with the technical team and discuss the exploration work being carried out.

Regency Chairman Andrew Bell comments: "The work carried out by the Company's geologists and consultants, both on the ground and through desk-top studies, has enabled us to refine quickly our understanding of these lightly mapped areas, to downgrade the potential of some parts, and to identify others as priority targets for exploration. Jebel Abyed and the Red Sea extension hold a great deal of promise and greatly strengthen our portfolio". 

The information in this report that relates to geology is based on information reviewed by Mr Gary Hurst (MSc), who is a Fellow of The Geological Society of London and Member of The Society of Economic Geologists. Mr Hurst is an employee of Red Rock Resources plc and has sufficient experience which is relevant to the style of mineralisation under consideration, and to the activities being undertaken. Mr Hurst has reviewed the information in this announcement and consents to the inclusion of the information in the form and context in which it appears.

 

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