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Regency and Legacy Hill form joint-venture to handle acquisitions
Regency Mines announced on Tuesday that it has executed a joint-venture (JV) agreement with privately-owned mining company Legacy Hill Resources.
Natural resource exploration and development company Regency said the purpose of the JV is the financing and structuring of acquisitions in the US metallurgical coal sector, and their subsequent management and operation.
Saradhi Rajan, managing director of Legacy Hill Resources, said: "Metallurgical coal has an important and irreplaceable role in the manufacture of steel. The USA has an important role to play in meeting global demand for high quality premium metallurgical coal. Together with Regency Mines we will be building a portfolio of low cost operations all with excellent access to infrastructure."
Legacy Hill will be responsible for the day to day management of the JV's operations and will own 30%, reflecting its role in financing, investing and managing the acquisition.
Regency will own 70% of the JV, equal to its proportion of its cash contributions.
Andrew Bell, chairman of Regency Mines, said: "We have been working with our colleagues at Legacy Hill over the last year with a joint venture in mind, and we now agree it is appropriate to formalise the structure. We expect Legacy Hill's cost-effective mine management to create a sound foundation for a growth strategy in metallurgical coal."
Regency and Legacy Hill have carried out due diligence in relation to the company's option to acquire the 80% of the Rosa metallurgical coal mine and treatment plant that is not already owned by Regency, and are now speaking to shareholders and reviewing information.
As of 1534 GMT, Regency Mines' shares were up 7.37% at 0.51p.