Dear Shareholders, In the six months to 31 December 2012 the Company, which earlier in the year had achieved a milestone when it declared a 162.5 million ton mineral resource at 0.94 per cent nickel and 0.09 per cent cobalt at its joint venture Mambare project in Papua New Guinea, switched focus to its other assets. In Western Australia our subsidiary Regency Mines Australasia Pty Ltd was active, carrying out initial analysis of earlier MMI (mobile metal ion) geochemical work at Pyramid Lake, and metallurgical testwork was carried out on titanium-rich clays from a small area of the project where we had previously carried out drilling. Initial exploration was carried out at the Munglinup graphite project, which is adjacent to the old Halberts mine, and talks began with the neighbouring owner on co-operation. We now plan to combine with their drill programme some exploration of our own. Initial research began on licenses we had applied for at Fraser West, and we looked again at the Bundarra copper-gold project in Queensland. After our neighbours Sirius made the Nova nickel discovery, our Fraser West tenements found themselves in the heart of what now seemed the most exciting exploration area in Australia. We wanted to put Fraser West into an Australian-listed vehicle that could act as a vehicle for raising exploration funding, as interest in the area around Nova was strongest among Australian investors, and therefore entered into a transaction with RAM Resources Ltd (ASX:RMR) whereby RAM would acquire in stages up to 100 per cent of the Fraser West tenements, initially acquiring 80 per cent for 1,205,000,000 RAM shares. Under the first stages of this agreement we were issued with 155,000,000 RAM shares (11.4 per cent of outstanding RAM shares), and after a hiatus due to illnesses and absences at RAM we have just appointed Bill Guy as a director to the board of RAM to carry through and market the next stages. Bill Guy is an experienced and energetic Australian geologist who was formerly the Chief Geologist at Jupiter Mines Ltd, and is a director of Regency Mines Australasia Pty Ltd. We are pleased to have his involvement. Elsewhere, we entered into an option agreement, later exercised, to enable us to farm in to Sudanese agromineral licenses. We have conducted several low intensity visits to the various projects, written the annual report for the new joint venture, and engaged with an expert consultant who worked for five years at the Saudi Al Jalamid phosphate deposit. We expect a revised concession agreement, covering all areas (including new and surrendered areas) and the different stages of exploration and development, to be executed at a signing ceremony in Khartoum, and until this occurs we are restricted in what we can discuss. Considerable potential exists for economic phosphate, potash, and gypsum mineralisation, and as an early investor in this vast and orderly country we have developed a strong working relationship with the authorities. It is pleasing to report that our joint venture partner in Papua New Guinea, Direct Nickel Ltd, in which we are an investor, was finally able to procure funding and start 24/7 operation of the pilot plant for its nickel treatment technology in January 2013. The testwork will last until the Autumn but periodic updates have indicated a good start. Our Mambare project has a license for this technology, that has the potential to change the nickel industry. In the period under review, a post-tax loss of £3,184,917 was incurred, compared with a loss of £1,484,313 in the comparable period of the previous year. The principal reason for this was the share of losses of associates of £2,071,632, which was due to the impairment charge taken on a major investment, Jupiter Mines Limited, at our associate company Red Rock Resources plc. In the coming period, we expect continued news flow from operations at Direct Nickel and from our Australian activities, while corporate activity will continue to be a focus. Preliminary discussions have taken place with a potential investor in our Sudan joint venture, and a potential industrial partner from Asia has signed a non-disclosure agreement and plans to visit Mambare with us this Spring 2013. We have also had discussions with a possible partner for our Queensland Bundarra project. While there can be no assurance that all or any of these discussions will bear fruit, they, and the RAM transaction, reflect our emphasis this year on seeking financially strong partners for our projects, so that we may leverage our exposure either by restriction of our own financial commitment or by partial realisation of profits and value. |