1

Sudan Agrominerals Report

In this report...2 Cultivating its

Agrominerals Potential is a Win-Win Strategy

6 Growth and Diversity Strategy Takes Root in Nubian New Dawn

7 Projects

8 Value Proposition

Sudan Agrominerals Report 2 3

Sudan: Cultivating its Agrominerals Potential is a Win-Win StrategyAfter years of conflict and a peaceable split from the South, Sudan is taking positive steps to embrace a more prosperous and secure future for its 34 million people. To offset and eventually eclipse the loss to the South of valuable oil production revenues, Sudan is currently focussed on significantly increasing its agricultural production and on continuing to open up its vast mineral resources to foreign investment. Developing its agrominerals potential will address both objectives, by increasing much needed mining derived export income, and by securing its own fertiliser requirements to help fuel vital larger scale domestic agricultural production.

About Agrominerals

Agrogeology is the study of minerals vital to agriculture, especially with regard to their impact on soil fertility and the quality of subsequent crop production. As essential plant nutrients agrominerals form a sub-group of industrial minerals including phosphate, potash, and gypsum. Individual agromineral components function in harmony to positively influence crop yields by strengthening root growth, enhancing resistance to disease and pests, and by increasing crop quality and quantity. Without sufficient amounts of each fertilser element, global food production would fail to meet the requirements of the world’s current population, let alone provide for those of the extra one billion people expected to be added by 2025.

Phosphorus: Much More than a Glow in the Dark!

All agromineral components are essential for optimal plant growth but without the phosphate rock derived element phosphorus, plant growth would cease altogether. In 1609 German alchemist Hennig Brand accidently isolated phosphorus and noted its ability to glow in the presence of oxygen. Brand couldn’t have known at the time that phosphorus’ luminescent attribute was a mere peculiarity compared to its necessity for the existence of all life forms on the planet.

Each of the billions of cells within us is surrounded by a membrane composed of phosphate derived phospholipids, without which they would cease to function. In effect we can’t live without phosphorus any more than we can live without water - and neither can the crops and livestock that feed us. Adequate phosphorus content in soil is a critical limiting factor in agriculture; and even when all other growth requirements are met, only adequate levels of phosphorus, for which there is no substitute, will ensure crop viability.

Potash: From Fireworks to Essential FertiliserUsed as a soil fertiliser since antiquity, potash provides the essential plant nutrient potassium which improves water retention and root growth and also enhances resistance to disease; serving to increase crop yields.

Potassium in the form of nitrate is an essential ingredient in gunpowder. Invented by the Chinese in the 9th century, gunpowder gave rise to the invention and use of fireworks. It was originally obtained by leaching the ashes of land and sea plants. Potash mining began in Ethiopia in the 14th century and mining is still the major source of global supply.

Most potash today comes from deep shaft mines which tap into vast underground beds of potash ore created from the sea water from ancient inland oceans; having evaporated leaving crystallised potassium salts.

Global potash production is likely to climb to 60 million tonnes in 2013, about 90% of which will find its way into fertilisers and constitutes the largest industrial use of elemental potassium. To this day, Ethiopia continues to mine potash from one of the world’s largest deposits located at TSX listed Allana Potash Corporations Danakil Project located on the Red Sea coast which contains a recently upgraded 2.44 billion tons of 17.9% potash.

Gypsum: World’s Oldest Building Material, and Now a Modern Fertiliser

Used to line the ancient pyramids of Egypt, gypsum is thought to be the world’s oldest building material. Gypsum is an evaporite mineral most commonly found in layered sedimentary deposits. As an essential fertiliser gypsum is used as a soil conditioner to supply calcium and sulphur to soils and to rehabilitate soils impaired by a high salt content. Gypsum contains sulphur as sulphate, the form which is readily taken up by plant roots. Mined as a naturally occurring product, small amounts of gypsum are also manufactured as a co product of phosphoric acid. In addition to its value as an essential fertiliser element, gypsum is also a major construction industry material with the average American new home containing over 7 metric tons.

The Challenges of Global Food SecurityRelatively cheap and plentiful food supplies in the developed world over the past few decades have led to increasing levels of obesity and epidemics of related diseases such as type 2 diabetes. But this seeming abundance of food supply deceptively masks the major challenge of ensuring secure future food supplies for a rapidly growing world population. It highlights a question that overshadows the 21st century: how to provide enough food for a global population that is, according to the United Nations, set to rise from 7 billion to more than 9 billion by 2050.

If not for the Green Revolution which took place between the mid 1940’s and 1970’s the world would already be suffering a severe food crisis. The term Green Revolution defines a period of research, development and technology transfers resulting in large agricultural production increases, particularly in the developing world. The initiatives, led by Norman Borlaug and credited with rescuing over a billion people from starvation, included the development of high-yielding crop varieties, improved irrigation technology, and large increases in fertiliser use. But a 2011 report suggests food productivity is now growing more slowly than the population.

A 2009 paper published by the Royal Society estimates that global food supplies need to increase by 70% in the next 40 years and highlights the supply of essential crop nutrients to help enable such a dramatic increase, as a potential critical limiting factor. Other key resources needed to ensure future food supplies such as water, sufficient arable land and cheap energy are also in short supply. Whilst these factors and the added risks of extreme weather due to climate change receive widespread publicity, the issue of secure agrominerals supply has so far received surprisingly little coverage. But this anomaly could be about to change with commentary such as a report from foreignpolicy.com which described the future of phosphorus supply as ‘the gravest natural resource shortage you’ve never heard of.’

Dates for your diary!Check out our list of upcoming eventswww.miningmaven.com

Sudan Agrominerals Report

Sudan Agrominerals Report Sudan Agrominerals Report4 5

The Mediterranean Phosphate BeltContaining approximately 79% of the world’s phosphate reserves the Mediterranean Phosphate Belt (MPB) stretches from Morocco in the west and extends across the top of North Africa to Turkey and Middle East countries in the east. These phosphorites are deposited along the southern edges of the Tethys Ocean, the ancestor of the present Mediterranean Sea, and along the north continental shelves of the Arabo-African craton.

The MPB consists of a Late Cretaceous- Early Eocene trend of phosphate rich marine formations and hosts multiple large scale phosphate rock mines responsible for 30% of world production. The Bou Craa mine in the Western Sahara region of Morocco contains one of the world’s largest phosphate deposits. Other large scale phosphate deposits along the MBT include Morocco’s Oulad Abdoun with an inferred resource in excess of 5Bt of 32% phosphate, the Al Jalamid deposit of over a 1Bt of 20% phosphate in Saudi Arabia, and Egypt’s Abu Tartur inferred resource of nearly 1Bt of 25% phosphate.

Agrominerals MarketsIn 2009 the Global Phosphorus Research Initiative calculated that phosphorus production could peak as early as 2033 with production decreasing until reserves are depleted within the next 50 to 100 years, and according to a report by Global Industry Analysts Inc. global demand for phosphate is expected to increase from current levels of around 50 million metric tons to 73.9 million metric tons by 2017.

Complicating factors in the security of future phosphate supply include large exports from mines located in Western Sahara, still a disputed territory within Morocco, and China’s recent imposition, and subsequent relaxation, of sharp tariff increases on phosphate. Its Ministry of Finance imposed the increases to curb exports and help retain phosphate output for its own use, and a repeat of such actions remains a lingering possibility. Phosphate rock prices sat below US$50 per tonne in 2006 before leaping above US$420 during the 2007-2008

About SudanSudan is the third largest nation in Africa. Bordered by Egypt to the north, Sudan also shares borders with Eritrea, Ethiopia, South Sudan, the Central African Republic, Chad and Libya. The Red Sea to the north-east comprises 853km of Sudan’s coastal border upon which Port Sudan, its main trading port, is located. The Nile divides the country into eastern and western halves with Sudan’s capital Khartoum built on the ‘al-Mogran’, the confluence of the White and Blue Niles forming the main Nile which flows north through Egypt to the Mediterranean.

In search of peace, Sudan split into two nations in July 2011 after the peoples of the south voted for independence and the subsequent creation of South Sudan. With 75% of its former oil production assets now located in South Sudan, the split has created urgent economic challenges for Sudan. In 2012 Sudan’s GDP amounted to US$59b or US$2,444 per capita with agriculture contributing more than a third. With the African continent the world’s least food secure, the opportunity for Sudan to increase its agricultural productivity is clear, as is its need to maximise production and further exploration from its remaining oil assets. But in order to truly transform its economy, Sudan’s greatest opportunity lies in the development of its largely untapped mineral wealth. Despite an historical mining legacy dating back centuries to the Kingdom of Nubia, less than 10% of Sudan has so far undergone any form of mineral exploration.

Indicative of its mining potential Sudan produced 50 tonnes of gold in 2012 with Mining Minister Kamal Abdellatif expecting a similar result in 2013. Such production levels rank Sudan as the third largest gold producer on the African continent and gold is now the country’s largest single export earner. In addition Sudan is believed to host potentially significant reserves of copper, zinc, iron ore and other minerals. Sudan also possesses significant agrominerals potential. The Mediterranean Phosphate Belt extends southwards into Sudan from Egypt where the Abu Tartur phosphate deposit hosts reserves of 987Mt of 25% phosphate and along its Red Sea coast substantial evaporite sequences are suggestive of the presence of potash deposits in a similar setting to world class deposits to the south in Eritrea and Ethiopia.

Devastated by 50 years of conflict Sudan has rarely reached the level of investment it deserves, but its government has moved quickly since 2011 to introduce the policies of free markets, the privatisation of government assets, restructuring of banking, and an increasing openness to foreign investment. Sudan already possesses surprisingly good infrastructure including a modernised power grid, improving rail links, a network of asphalt roads and a modern trading port on the Red Sea. Despite its challenges Sudan has the potential to re-establish its former status as a vibrant trading and cultural bridge between Africa and the Arab world, and in the process replace its troubled past with a future of peace, hope and prosperity.

resources boom with prices currently trading around US$170 and expected to remain stable over 2013 before rising in line with growing demand.

Like phosphate, there is very big money in potash. In 2010, recognising that growing food demand dictates higher prices for increasingly scarce agrominerals, BHP Billiton made a hostile bid of US$39 billion for Canada’s Potash Corporation of Saskatchewan (PCS), the world’s largest fertilizer maker. PCS is one of the world’s largest producers of both phosphate and potash. BHP spent US$350m on its bid only to see it blocked by the Canadian government. Potash prices began the last decade below US$150 a tonne before soaring above US$1,000 during the commodity boom in 2007-08. Potash prices currently average around US$400 per tonne with Goldman Sachs expecting prices to average US$520 per tonne over 2015-2017.

Links:

Phosphate Rock Price Charts

Potash Price Charts

Regency Mines

Date August 2013

Price 0.56p

Market Cap £5.6m

Code RGM

Listing AIM

Shares in issue 1.106b

Visit MiningMaven’s Regency Mines profile for company Q&A’s, podcasts, presentations and more...www.miningmaven.com

Sudan Agrominerals Report Sudan Agrominerals Report6 7

The old story of Sudan as a land of conflict began its rewrite in July 2011 when in search of peace and prosperity Sudan split into two nations. Now, in a bid to restore its former glories of Nubian wealth and splendour Sudan’s Ministry of Minerals is busily charting a course to a future mining based economy. In November 2012, following exhaustive due diligence consisting of numerous field trips and extensive technical reviews, Regency Mines (LON:RGM) exercised an option to earn up to a 51% interest in International Mineral Resources (Agrominerals Sudan) ‘IMRAS’. With both British and Sudanese partners, London based IMRAS holds concessions over highly promising agrominerals prospects in Sudan possessing realistic potential for large scale phosphate rock and potash discoveries.

Regency Mines was listed on AIM in 2005 to invest in the mining and minerals sector both directly and indirectly, and to develop multi-commodity opportunities. In gaining a strategic exposure to the agrominerals sector, Regency’s Sudan strategy adds an additional key project and diversification to the company’s large scale Mambare lateritic nickel-cobalt deposit in Papua New Guinea, an interest in an advanced new nickel laterite treatment technology, and other exploration and mining interests through associated companies.

IMRAS has negotiated a series of agrominerals concession agreements with the Sudan Government and with its support, intends to develop as the representative agrominerals company of Sudan.

Regency has farmed in to a 26% interest in IMRAS and holds the right to increase this to 51% by exploration leading to the development of two JORC resources.

Work to date by Regency’s geologists and consultants, both on the ground and through geological desk-top studies and literature reviews, has enabled it to quickly gain an understanding of the original concessions on offer from IMRAS and to identify additional opportunities as priority targets for exploration. Based on this work, Regency has identified an additional 26,000 square km area believed to cover large areas of the MPB. Known as Jebel Abyad this new concession has subsequently been granted to IMRAS by the Ministry of Minerals. Additional research by Regency’s geologists around the Red Sea potash and gypsum license area has resulted in the granting of a substantial extension to the north of the original license, as indicated by their April 2012 announcement.

Although early stage, the pursuit of successful exploration outcomes is eagerly supported by Sudan’s Ministry of Minerals, the senior geologists of which are assisting with target prioritisation, and its junior geologists are accompanying Regency on field trips to develop their agrominerals expertise.

With its focus over the remainder of 2013 firmly on the Jebel Abyad and Red Sea concessions, Regency will continue to identify and refine other areas of future interest in the execution of its Sudan agrominerals strategy.

The Projects

The Jebel Abyad Project

The 26,000 square km Jebel Abyad concession covers an area underlain by sedimentary marine rocks of a similar age to the prolific Mediterranean Phosphate Belt and with its geology correlative to the Duwi phosphate formation to the north, host to the Abu Tartur phosphate deposit. Phosphate occurrences reported within the concession at ‘White Mountain’ gave rise to its name, with ‘white mountain’ translating to ‘Jebel Abyad’ in Arabic.

The primary target within the concession is the southern extension of the MBT and the hoped for large scale sedimentary phosphate deposits typical of this belt. A work program consisting of geochemical sampling and geographical mapping along 350km of transect lines is currently underway across Jebel Abyad along with continuing field excursions to the most prospective phosphate targets with a view to identifying phosphate anomalies for testing.

The Red Sea Project

Located 200km north of Port Sudan the Red Sea concession is contained within the Red Sea rift system and conveniently located adjacent to a major coastal highway. 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. Geological correlation to the south along the Red Sea rift system indicates a potential association with Eritrea’s Colluli deposit of 194Mt contained potash, and the Danakil potash deposit in Ethiopia.

In a Red Sea update announced on 5th August 2013 the company reported highlights from its recent field visit to the concession area led by the company’s geologists. Aided by prior extensive desk top studies and literature reviews, the field visit has identified 6 gypsum targets at surface, with an interpreted combined exploration target of 16-808Mt* gypsum. The gypsum is believed to belong to the Dungunab Formation where wells drilled for petroleum exploration in the 1960s intercepted over 700m of evaporites in the Dungunab-1 borehole just south of the Red Sea concession area.

Information acquired during the recent visit to the GRAS offices in Khartoum includes well log-summary reports of the Dungunab-1 borehole which describe extensive halite and anhydrite formations, locally rich in potassium (potash). Subsequently an application has been made to the Ministry of Minerals for an extension to the south of the current concession.

While no potash or halite was identified at surface during the field visit, data collected indicates a potential potash area of interest in the south of the concession where the halite sequence may be close to the surface. Field work completed by Regency has led to a reinterpretation of known geological information across the concession, and a more accurate understanding of the local evaporite sequences has allowed for the definition of a solid potash exploration target.

A planned follow up work programme will include field work in the area of interest in the south of the concession, with a view to defining a potential potash exploration target. The 6 recently identified gypsum exploration targets will be further examined and evalu-ated with a view to determining the total thickness of the gypsum units. Work will include additional geologi-cal mapping, sampling and geochemical analysis, and a possible drill and/or trenching programme to determine gypsum thickness, and reveal any halite potential, if none is exposed at surface within the concession.

The Abu Hashem Project

The Abu Hashem concession covers 48,080 square km to the south east of Jebel Abyad and north-west of Khartoum. Its eastern side is dominated by Cretaceous fluvial and lake sediments with fluvial and near-shore marine sandstone and overlying shale along its northern border. Abu Hashem is further to the south from the defined MPB and mapped of a different sedimentary environment to Jebel Abyad.  Although prospective for phosphate, the company’s resources are currently focussed on the more advanced Jebel Abyad and Red Sea Projects.

Growth and Diversity Strategy Takes Root in Nubian New Dawn

Sudan Agrominerals Report 8 9

The Value PropositionMuch has been achieved in the 12 months since Regency entered into its option agreement with IMRAS, and this is testimony to the company’s uncommon ability to quickly muster significant resources behind new projects.

Regency’s diversification into agrominerals is a far sighted one based on securing an exposure to fertiliser elements critical to future global food security. To meet the demands of projected population growth, world food production will need to increase by a staggering 70% by 2050. The achievement of such an increase will place large demands on the secure future supplies of vital fertiliser components needed to support it. As global population increases, the amount of arable land available per person decreases, thus creating a scenario of ever increasing crop yield demand, a primary driver of which is optimal fertilser use. Regardless of the availability of arable land and other essentials such as sufficient water, without these critical fertiliser components global food supply would collapse.

Regency is a relative early mover in Sudan, especially amongst western companies, and its joint venture with IMRAS affords it a smooth entry into a region with undisputed and largely undeveloped mineral wealth and a pressing need to develop it. Regency’s developing relationship with Sudan’s Ministry of Minerals should be viewed as mutually beneficial with the potential to eventually reach beyond phosphate and potash, to other mineral resource opportunities as well. In addition, the in-house agrominerals expertise being developed by Regency can in future be applied to similar resource deposits elsewhere. The presence of consultant geologist Alan Watson on Regency’s team helps facilitate such expertise and as a key contributor to the discovery of the the 1.07Bt Al Jalamid phosphate deposit in Saudi Arabia, his knowledge can hopefully help lead to similar successes in Sudan.

With its major trading port located on the Red Sea, a successful agrominerals outcome would leave Sudan strategically well placed to export to India, Asia, and Europe, as well as to African nations; currently amongst the most food poor regions on earth. And as a bonus, a successful outcome would secure Sudan’s own future agrominerals requirements as well.

Share this article

Follow us on Twitter

www.miningmaven.com

Agrominerals and Nickel Laterite: Potentially Company Transforming for RegencyApart from agrominerals, Regency’s other projects include its outstanding Mambare nickel-cobalt deposit in Papua New Guinea. With a JORC compliant indicated and inferred 162.5Mt of 0.94% nickel and 0.9% cobalt, the deposit represents one of the world’s largest nickel laterite resources with substantial potential to grow even larger. Its 50:50 JV partner Direct Nickel (DNi), a company in which Regency holds a 7.5% stake, is at a test plant stage of applying patented technology to the treatment of nickel laterite ore which is expected to be able to change the economics of deposits such as Mambare and enable them to become lower cost and more viable mining operations. Recently DNi announced that its Perth test plant has produced its first marketable nickel/cobalt concentrate and subject to continuing positive results from the test plant, a further announcement stated that ANTAM and DNi aim to execute definitive agreements to develop the first nickel laterite processing plant in Indonesia, using the DNi process.

These landmark developments add significant value to both Regency’s Mambare Project, and its interest in DNi. In addition Regency holds multi-commodity exposures through other corporate investments in AIM and ASX companies focussed primarily on base metals exploration in Australia. The estimated value of the company’s corporate investments alone exceeds Regency’s current market capitalisation of just £5.6m, but successful outcomes for either of its agrominerals or nickel strategies, or at Fraser West could potentially be company transforming.

Mambare

Port Moresby

All figures quoted have been obtained from the respective company websites and/or publically available sources. All written content represents the views and opinions of MiningMaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation to buy shares in any company featured by MiningMaven. All opinions expressed are those of the author/s and unless otherwise stated should not be construed as being made on behalf of any featured company. From time to time MiningMaven principals may take equity positions in companies featured by MiningMaven. Readers are advised to conduct their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

You may print extracts of this report or content from the MiningMaven website for your own personal and non-commercial use only. Republication of this report or any other MiningMaven content or “cut & pasting” onto bulletin boards or any public online forum, is expressly prohibited without the prior written consent of MiningMaven. However, distribution and sharing this report by email or through Social Share tools or hyperlinks and linking directly to the MiningMaven website is permitted and encouraged.

All rights reserved. Errors and omissions excepted. All logos images and trademarks displayed in this report and on the MiningMaven website remain the property of the respective trademark owners.

Remember to join our mailing list at www.miningmaven.com for free subscription to our regular Investor Newsletter and priority registration for our free to attend investor events.

Copyright © MiningMaven 2013.