Regency Mines PLC

("Regency" or the "Company")

2020 Exploration Programme

Dempster Vanadium Project

13 July 2020

Regency Mines Plc (LON: RGM), the natural resource exploration and development company with interests in battery metals and flexible grid solutions, announces the sanction of the 2020 exploration season at the Company's Dempster Vanadium project in Canada, in which Regency owns a 50% interest.  

Highlights:

o  Programme to include soil and geochemistry program, including 300 samples planned for an unexplored section of the project

o  Suite of existing core pulps to be reprocessed for indications of major oxides and carbon (both highly correlated with elevated vanadium results)

o  Collaboration with PhD Candidate from McGill University planned - will gather information on metal enrichment - improving overarching black shale geological model

o  Programme expected to commence in August 2020

o  Company anticipates project to be positioned for a drilling campaign in 2021

Scott Kaintz, CEO, commented: "We are delighted, together with our JV partners, to have approved the mobilisation of a team of geologists to conduct soil sampling and mapping activities this summer at our Dempster Vanadium project in the Yukon.  This effort is in line with our battery metal exploration activities, where relatively small amounts of expenditure can often have disproportionate benefits for the Company.

A portion of these activities will be performed in collaboration with a Ph.D. candidate at the Department of Earth and Planetary Sciences of McGill University in Montreal, Canada, with the project benefiting from this in-kind research."  

2020 Exploration Program Rationale and Details

The work on the Dempster Vanadium project conducted to date as outlined in a report by Breakaway Exploration Management Inc. has confirmed that the shales underlying the property contain significant vanadium over broad stratigraphic intervals.  The best results include 0.39% V₂0₅ over 75.9m, 0.32% V₂0₅ over 38.2m and 0.39% V₂0₅ over 90.16m.  These intersections are comparable to grades and thicknesses for similar deposits currently being explored both in Canada and the United States, and demonstrate potential to host an economic deposit of vanadium. 

Mark Fekete and Marty Huber, 2020, Exploration Proposal 2020 - Dempster Vanadium Property

More research is required to further explore the project and identify the fundamental processes that generated the unusual metal enrichment within them.  As such the JV partners will be working with McGill University in Montreal, Quebec, over the summer of 2020 to investigate the role of organic material and related hydrocarbons in the metal enrichment processes within shales.

Supporting these efforts, the Dempster JV Partners will conduct a 300 sample soil geochemical survey to refine drill targets along the project, all easily accessible from the Dempster Highway.  The work will focus on a 3km segment where no soil samples have been collected previously.  Additionally, a suite of core pulps from drill core inherited on the project will be re-analysed focusing on major oxides and carbon levels, as both are considered significant indicators of elevated levels of Vanadium.       

The programme is expected to take a number of weeks and cost approximately £35,000 which will be funded by the Company, further to the announcement of 24 Jan 2019.

It is anticipated that once drill targets are secured, the project would be positioned for a drilling campaign in 2021.

About the Dempster Vanadium Project

The Dempster Vanadium project includes 196 claims over 40.96 square kilometers covering a mineralized trend with over 20 kilometers of potential strike.  The property sits approximately 65km north of the Eagle River Lodge in the Yukon, with its entirety within easy access of the Dempster Highway, a major north-south artery. 

The primary exploration target is vanadium in black shales ("Vanadium-rich Black Shale" or "BSV deposits") covering a segment of a regional scale contract between two distinct sedimentary formations.  The base of the upper formation is marked by a black shale horizon (the "BSV horizon"), and at the base of this horizon there is a discrete layer of metal-bearing, organic-rich black shale. 

Previous work on the property conducted by prior owners was focused on nickel mineralisation and generally ignored the vanadium potential.  In 2006 Héon reported the initial discovery of vanadium in the area from a road cut on the Dempster Highway, where rock chip sampling returned 0.26% V₂0₅ along 7.3m.  Numerous grab samples in the area also returned high vanadium values.   

These activities were followed up by drilling for Nickel-Molybdenum (NiMo) mineralisation by Southampton Ventures in 2007.  This work included surface geochemical sampling followed by diamond drilling.  Soil results outlined numerous broad zones of strongly anomalous vanadium with values ranging from 8 to 20 times greater than background levels, defined as less than 100ppm.  Elevated values were also noted for several other metals including barite, nickel, silver and zinc.  Zinc in particular corresponds well to vanadium, with rock samples returning up to 1,810ppm vanadium.       

Seven diamond drill holes were completed covering 720.9m of core.  The partial logging of these holes (DV-01 to DV-07) has shown this layer to be strongly enriched in a number of metals including vanadium.  However, due to the drilling being focused on visible base metal sulphide mineralisation, not enough samples were collected to define the upper and lower limits of the vanadium mineralization.  The BSV horizon is found at surface and would appear to be exploitable by open-pit mining methods.  The BSV horizon is broadly continuous within the property with minor offsets due to vertical faults. 

The layer continues outside the boundaries of the property but becomes progressively more distant from the highway.  The BSV mineralisation present on the property is believed to be a large-scale syngenetic event caused by the reduction effects of organic material in a restricted epeiric, anoxic basin.  Hydrothermal venting may be a possible source for the metals.

The drill intersections reported by Southampton Ventures were:

Mark Fekete and Marty Huber, 2020, Exploration Proposal 2020 - Dempster Vanadium Property

1.      All intersections open up and down hole, i.e. V₂0₅ intervals potentially wider than reported

2.      Vanadium parts per million (V ppm) converted to vanadium pentoxide per cent V₂O₅ by factor of 1.7852 

In 2019 core from drill hole DV07-01 was located on the property and relogged and unsampled intervals sampled.  This sampling, which included 326 samples covering 328.59m of core, was more intensive than previous works.  These efforts returned vanadium values ranging from 178-3,062ppm V with an average of 1,719ppm V, confirming that the shales underlying the property are highly enriched in vanadium as compared to baseline levels between 130ppm V and 205ppm V.  Zinc values were also elevated ranging from 16-4593ppm Zn with an average of 1,723ppm. 

Vanadium Overview    

90% of the world's vanadium supply is currently being used by the steel industry, with ferrovanadium an essential hardening agent in steel alloys used for the manufacture of axles, tools and structural rebar.  Rebar in particular is essential to emerging market infrastructure projects.  China is the largest producer of mined and recycled vanadium and in 2017 the United States declared vanadium a critical metal due to its perceived strategic importance and limited domestic supply. 

More recently Vanadium is seeing increased usage in energy storage projects in the form of vanadium redox flow batteries ("VRFB").  These are typically larger batteries ideal for grid level projects as they offer extremely large storage capacities and can sit for long periods of time due to their slow rate of self-discharge and numerous available charge cycles.  These batteries are modular, scalable, can last 20-30 years, are safe and require little maintenance.   VRFBs require very pure >98% flake vanadium pentoxide to produce.

Vanadium-rich titanium magnetite ("VTM") deposits are currently the largest vanadium producers worldwide.  Such deposits consist of vanadium rich sequences of iron or iron-titanium oxides found in large layered magmatic intrusions.  However, these are generally complex deposits with the vanadium tightly enclosed within ilmenite or magnetite, which can pose challenges around processing. 

Vanadium-rich black shale deposits typically grade between 0.2% V₂0₅ and 1.8% V₂0₅ and are marked by large areal extensions, steady grade, consistent geometry and simple mineralogy, all which favour low-cost mining and processing methods.      

Amended Agreement

Regency Mines, Breakaway Exploration and the Vendors of the Dempster Vanadium Project have agreed to amend the terms of the original transaction as announced on 24 January 2019, and in particular have agreed that Regency will fund a minimum exploration spend of C$150,000 and upon completion of this spend prior to 31 December 2021, the joint venture will revert to a diluting partnership.  The parties have also agreed to formalise the documentation governing the Joint Venture in the near term.        

Competent Person Statement

The technical and related information in this announcement has been reviewed by Mark Fekete, PGeo. Mr Fekete has designation as a professional geologist in Quebec and British Columbia and is a qualified person for the preparation of reports under the Canadian disclosure standard NI 43-101. He has sufficient experience in the style of mineralisation and type of deposit under consideration. He approves the inclusion in this announcement of the technical information in the form and context in which it occurs. Mr Fekete is a principal of Breakaway Exploration Management Inc.

For further information, please contact:

Scott Kaintz 020 7747 9960                                                        Director Regency Mines Plc

Roland Cornish/ Rosalind Hill Abrahams 020 7628 3396           NOMAD Beaumont Cornish Limited

Jason Robertson 020 7374 2212                                                Broker First Equity Limited

This announcement contains inside information under Article 7 of Regulation (EU) 596/2014.