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Corporate Governance

The Board is committed to maintaining high standards of corporate governance and in this it is guided by the Quoted Companies Alliance’s Corporate Governance Code (the “QCA Code”). The QCA Code sets out 10 principles that are listed below together with a short explanation of how the Company applies each of the principles and reasons for any non-compliance.

Principle One
Business Model and Strategy for promotion of long-term value

Regency Mines Plc follows a medium to long-term corporate strategy with the objective of identifying and developing natural resource investments with attractive risk weighted return profiles. These may include early stage exploration projects with higher risk and larger upside as well as more mature and conservative investments with near-term cash flow potential. The Company is also interested in leveraging its existing portfolio of nickel-cobalt assets through exposure to the ongoing revolution in batteries and energy storage technologies.Through a policy in recent years of diversification into coal, oil and gas assets with shorter development timeframes and greater fungibility the Company seeks to balance the earlier stage and more capital intensive nature of its other assets.

The aim is to create a cash-generative arm of the business through, in particular, metallurgical coal production, in order to allow the earlier stage assets, in particular the very large nickel-cobalt asset in Papua New Guinea, to be retained and advanced on their very different and longer time-frame.

The Company delivers its business strategy with tightly controlled overheads, supplementing its financial resources through corporate transactions, JVs and partnerships, as well as trading and disposals or exchange for listed shares of non-core assets.

The Company also takes into consideration various risks and mitigation measures in order to minimize impacts on the environment and communities when executing its business strategy. The Company seeks to grow its business and make acquisitions and disposals to crystallise value added and enhance shareholder value.

Principle two
Understanding Shareholder needs and expectations

The Board understands the needs and expectations of its various shareholders, who all share a desire to maximise the value and growth of the business, but may do so with different time frames and outcomes in mind.

The Board recognizes that in order to ensure a good match between the shareholder profile and the Company’s Business Model and the plans for implementation of that model, it needs to manage shareholder communications clearly regarding Company plans, expectations and timelines.

The Company does this by giving regular updates on developments via RNS announcements, an occasional newsletter, Twitter at @Regency_Mines, Company interviews with and a website at Proactive Investor, the use of other similar services, and informal and formal meetings including phone-in meetings, in order to serve the needs of private and institutional investors as well as analysts.

The Company also participates in the UK Investor Show and other relevant industry investor shows, including Investor Presentation Evenings, so that shareholders can meet us in person to answer their queries, and management can provide information on current developments at the Company

The Company takes into consideration shareholders’ views and suggestions and uses all opportunities to encourage shareholders to call or email the management direct at their publicly available numbers and addresses.

Group site visits are offered to shareholders expressing interest in particular investments.

Shareholders are also encouraged to attend the Company’s Annual General Meetings of which the shareholders are notified via Company’s website as well as e-mail or post, where they have an opportunity to share their views on the business and ask questions. Management try to contact as many shareholders as possible before the meeting to encourage their attendance.

The Company advises potential shareholders to do their own research on the Company and its long-term investment projects, evaluating all possible investment risks before becoming a shareholder.

Principle three
considering wider stakeholder and social responsibilities

The Business Model of the Company is to deliver shareholder value through various stages of mineral exploration investments and corporate transactions, JVs and partnerships.

The Company also recognizes duties to other parties, including employees whether at parent company or joint venture and investment level business partners, consultants and contractors as well as suppliers, service providers, and regulators.

The Board recognises that the long-term success of the Company will be enhanced by good relations with different internal and external groups and to understand their needs, interest and expectations, the Board has established a range of processes and systems to ensure that there is ongoing two-way communication, control and feedback processes in place with to enable appropriate and timely response.

The Company takes into consideration the environment in which it invests. Therefore, good relations are cultivated with local governments and communities, aiming to better understand various parties’ aspirations and ensure that the Company’s business activities are compliant not only with local and global laws, including environmental laws, but also where possible take account of local expectations and priorities.

The Company’s approach to managing corporate social responsibility is depended on a project’s development stage.

Principle four
Risk Management

To execute and deliver the Company’s strategy, the Risk Management Framework has been developed, which identifies the risks to which the Company has been or could be exposed. This framework has been in use for number of years, changing depending on the Company’s size and its business activities, and serves as an internal control measure. The Risk Management Framework takes into consideration the following key categories of the business, namely, the Management, Regulatory, Financial, Operational, HR, H&S, Political, Environmental and Other Risks. Each category identifies varied risks and addresses those risks separately, assigning a risk score, likelihood, control measures in place and control measures that need to be taken to mitigate the risks, identifying a responsible person and the action deadline. The risk management is an ongoing process and extends to overseas activities as it is appropriate, taking into consideration the local as well as the UK regulatory requirements.

In addition, the Audit Committee overseas the Company’s financial reporting, including accounting policies and internal financial controls and is responsible for ensuring that the financial performance of the Company is properly monitored and reported to the Board.

Close day to day control is also exercised by the Executive Directors to ensure the effectiveness of the Company’s control systems.

Principle five
A well functioning board of directors

The Board has responsibility to govern the Company rather than to manage it and in doing so act in the best interests of the Company as a whole. The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and operational performance. Day to day management is delegated to the Executive Directors, responsible for consulting the Board on all significant financial and operational matters. The Board approves the annual budget and amendments to it, issues of shares or other securities and all significant acquisitions and disposals.

The Board comprises three Directors, namely Andrew Bell, the Chairman and CEO, Scott Kaintz, Executive Director and COO/CFO, and an Independent Non-Executive Director Edmund Bugnosen. Biographical details of the current Directors are set out within Principle Six below. One-third of the Executive Directors and Non-Executive Directors retire by rotation under the Articles of Association of the Company and, may offer themselves for re-election.

The Board recognises that, in having a Chairman who is also the CEO, best practice, as stated in the QCA Code, is not being followed. However, it is the opinion of the Board as a whole that the current arrangements are appropriate to the Company at its current size and stage of development, and that sufficient experience and compliance structures exist within the Company to ensure that the corporate governance functions that would be part of an independent Chairman’s responsibility are carried out. Principle Nine below elaborates further on this matter.

The Directors acknowledge that there is an immediate need for a second Independent Non-Executive Director, with appropriate skills, to join the Board in order to have a suitable balance between the Executive and Non-Executive Directors as is recommended by the QCA Code, and expects to make an appointment shortly.

It is the intention of the Company once its size and the scope of its operations permit to develop its organizational structure to comply more fully with the Code, including in relation to the dual role of the Chairman.

The Board, through the Chairman, the Executive Director and the Non-Executive Director, maintains regular contact with its advisers, brokers and other consultants in order to ensure that the Board develops an understanding of the views of shareholders about the Company. The Board is also supported by the Audit and Renumeration Committees the details of which are set out in Principle Nine.

The necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively. All Directors have access to the advice of the Company’s solicitors and the Company Secretary as well as independent professional advice, at the Company’s expense, as and when required.

The Non-Executive Director has the same legal responsibilities to the Company as any other Director, including attendance at the regular Board Meetings, the Committee Meetings and the General Meetings. The Non-Executive Director receives a formal letter of appointment setting out the key terms, conditions and expectations of his appointment.

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director. The Board meets regularly throughout the year as deemed appropriate formally and informally, in person and by telephone.

Principle Six
appropriate skills and experience of the directors

The Board consists of three Directors and the Company believes that the current balance of resource sector, technical, financial, accounting, legal and public markets skills as well as experience of the Board as a whole, reflects its business requirements. However, as advised by the QCA Code, the Board considers it necessary to appoint a second Independent Non-Executive Director with appropriate skills, in order to have a suitable balance between the Executive and Non-Executive Directors. The Board shall review annually and when required the appropriateness of its mix of skills and experience to ensure that it meets the changing business needs.

The Board recognises that while it has diversity this does not include gender balance and will give this factor due consideration in future appointments.

 

Andrew Bell, MA, LLB
Chairman and CEO

Andrew Bell began his career as a natural resources analyst at Morgan Grenfell & Co. in the 1970s. His business experience encompasses periods in fund management and advisory work at leading financial institutions, international corporate finance work and private equity. Andrew Bell’s listed company directorships are Red Rock Resources Plc (AIM), Chairman and CEO, Jupiter Mines Ltd (ASX), Non-Executive Director. Andrew Bell is also a former Director various resource sector companies including Star Striker Ltd (now Intiger Group Ltd) (ASX), and a former Non-Executive Chairman of Greatland Gold Plc (AIM).

Andrew Bell has considerable sector experience, and his relevant skills also include financial, business and legal analysis, knowledge of Asia, as well as experience of public markets.

 

Scott Kaintz, BSc, MBA
Executive Director, COO and CFO

Scott Kaintz has an MBA from London Business School and Columbia Business School. He started his career as a US Air Force Officer and analyst working across Europe, the Middle East and Central Asia. Scott Kaintz has held operational and managerial roles in the defense industry and worked in corporate finance and investment funds in London, focusing primarily on capital raising efforts and debt and equity investments in small-cap companies. He joined Red Rock Resources Plc in 2011 in a Corporate Finance role and has subsequently become an Executive Director where he works to identify, evaluate and source funding for natural resource development projects. Scott Kaintz is also an Executive Director of Red Rock Resources Plc, listed on AIM and has following Non-Executive Directorships at Curzon Energy Plc, listed on the LSE, and White Car Ltd, a private company.

Scott Kaintz has relevant skill sets in financial analysis, modelling, budgeting, and finance, and has worked for a number of years in the public company arena and in the resource sector. He also as a U.S. citizen understands the U.S. corporate and business environment.

 

Edmund Bugnosen, BSc
Non-Executive Director

Edmund Bugnosen has a BSc in Mining Engineering from Adamson University, Philippines and studied Environmental Science at the International Institute of Hydraulics and Environmental Engineering (IHE) in Holland. He has worked in both the government and private sectors of the Philippine mining industry. Since 1989 he has worked out of the UK as a consultant for governments, mining companies, NGOs and development agencies, including the UN, UNIDO, the World Bank, the EU, ILO, DFID, and the BGS. Edmund Bugnosen has also served as Senior Mining Engineer in the Department of Mines and Petroleum of Papua New Guinea and as a Technical Assistant to the Namibian Ministry of Mines and Energy. He has published and presented papers on mining laws and regulation, small-scale mining and related environmental, social and development issues.

Edmund Bugnosen has considerable sector experience, and technical skills, and a strong knowledge background on Papua New Guinea.

 

All Directors, through their involvement in other businesses as well as the Company, are enabled to keep their skill sets up to date and receive a diversity of opinions and inputs, ensuring an open and not an inward-looking culture at the Company.

The Board promotes open and collaborative interaction between its members. Where a consensus is not reached, an action is not taken.

Legal advice is sought in cases of doubt or where a potential contract or dispute is in question. Where involvement in a mineral project is considered, the due diligence process will normally include one consultant from a major consultancy to provide an initial or second opinion on technical aspects. The Remuneration Committee normally obtains external reports on comparators before arriving at its decisions.

Principle seven
Evaluation of board performance

The internal evaluation of the Board, the Committees and individual Directors, including any succession planning, is undertaken on an annual basis, to determine the effectiveness of their performance and suitability to the changing business requirements. There is also a continuous and ongoing process of evaluation, which historically has resulted in an increase in board size as the business grew to 2010, and a shrinking in the board size and remuneration as the business became affected by the poor markets for nickel and other commodities in the years after 2011. The skills required at board level changed under the pressure of these events, and this also influenced board composition decisions.

The assessment criteria are based on the need to promote the Company’s Business Model, industry practices and the need for balance, the Company’s immediate aspirations as well as the specific skills, knowledge and capabilities that are required to perform certain roles.

The results and recommendations that come out of the appraisals of the Directors and members of the Committees, identify the required changes and actions for the Board and the Committees as units as well as individually for the Directors and members of the Committees.

Principle eight
Corporate culture

The Company aims to deliver long-term value to its shareholders through a diverse portfolio of revenue generating mineral exploration investments. Therefore, the Company aims to ensure an open and respectful dialogue with shareholders and other interested parties for them to have the opportunity to express their views and expectations for the Company. In this dialogue the importance of sound ethical values and behaviour is emphasized, both because it is important if the Company is to successfully achieve its corporate objectives that this culture is transmitted through the organization, and also to set a benchmark and send a signal of what it will and will not do in some of the jurisdictions in which the Company operates.

The Board places great importance on this aspect of corporate life, where failure could put the Company at risk, and seeks to ensure that this flows through all its business interactions and at all levels of the Company.

The Board also recognises that its decisions regarding the business model, strategy and risks will impact the corporate culture of the Company and the tone and culture set by the Board will influence the behaviour and performance of those who it employs or with whom it deals. The corporate governance arrangements that the Board has adopted, together with a punctilious observance of applicable regulatory requirements also form part of the corporate culture, requiring a standard of behaviour when interacting with contractors, business partners, service providers, regulators and others. For example, the Company has adopted an Anti-Corruption and Bribery Policy, HR and H&S Policies that dictate acceptable behaviour, as well as the Share Dealing Code for Directors and employees, required for the AIM listed companies and in accordance with the requirements of the Market Abuse Regulation, which came into effect in 2016.

Principle nine
Maintenance of governance structures and processes

The Board has responsibility to govern the Company rather than to manage it and in doing so act in the best interests of the Company as a whole, establishing and maintaining corporate structures and processes in line with current legislation, its business aspirations and its corporate culture, that are appropriate to its size and complexity, capacity and tolerance for risk.

Description of Roles
The Chairman & CEO is the leading representative of the Company presenting the Company’s aims and policies to the outside world. His responsibilities include taking the Chair at Board Meetings and General Meetings, where he is responsible for ensuring the appropriate supply of information. He is also responsible for leading the development and execution of the Company’s long-term strategy, overseeing matters pertaining to the running of the Company and ensuring that the Company meets all legal requirements and corporate responsibilities. He assists in the response to shareholder inquiries and meets or speaks to shareholders as required. The Company considers that having the same person as Chairman and CEO is appropriate to the Company at its current stage of development, and that sufficient experience and compliance structures exist within the Company to ensure that the governance functions that would be part of an independent Chairman’s responsibility are carried out.

The Independent Non-Executive Director sits on the Audit and Remuneration Committees, particulars of which appear hereafter, which are responsible for reporting the conclusions to the Board and for keeping up to date with the work of the corporate governance and liaising with those responsible for the Risk and Health and Safety management.

The Executive Director and COO, whose responsibilities encompass those of a Finance Director/CFO, is responsible for the day to day management of the business, works with the Chairman to develop and execute the long-term strategy of the business, and is responsible for its implementation. He also develops budgets and identifies changes in the financial outlook of the Company, and recommends responses. He shares responsibility for ensuring that the Company meets its legal requirements and corporate responsibilities, and oversees the Annual Report, website, and various staffing and compliance issues. He works jointly with the Chairman on shareholder and communication issues.

Audit Committee
The Audit Committee considers the Company’s financial reporting, accounting policies and internal financial controls. It is also responsible for ensuring that the financial performance of the Company is properly monitored and reported on. The Audit Committee reviews the annual and half-yearly financial statements, to ensure that they adequately comply with appropriate accounting policies, practices and legal requirements, to recommend to the Board their adoption and to consider the independence of and to oversee the management’s appointment of the external auditor.

The Audit Committee is comprised of Edmund Bugnosen, Non-Executive Director as Chairman and Andrew Bell, Chairman. The Audit Committee meets at least twice a year, once with the auditor. The CFO will attend the Audit Committee’s meetings as requested by the Committee.

Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board on Executive Directors’ remuneration, which also recommends and monitors the level and structure of remuneration for senior executive management, ensuring safeguards are in place to prevent awards made for poor performance. The Remuneration Committee comprises of Edmund Bugnosen, Non-Executive Director as Chairman and (pro tem) Andrew Bell, Chairman. Other senior personnel attend the Remuneration Committee’s meetings as requested by the Committee, which meets at least twice a year.

The Board has not established a Nominations Committee. Matters that would normally be dealt with by the Nominations Committee will be discussed by the Remuneration Committee and referred to the Board as a whole.

Non-Executive Appointment Terms
The Non-Executive Directors have the same legal responsibilities to the Company as any other Director, including attendance at the regular Board Meetings, the Committees’ Meetings and the General Meetings.

Matters Reserved for the Board
The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and operating performance. Day to day management is delegated to the Executive Directors, responsible for consulting the Board on all significant financial and operational matters. The Board approves the annual budget and amendments to it, issues of shares or other securities and all significant acquisitions and disposals.

Corporate governance is an ongoing and proactive process that encompasses the regulatory requirements and the changing needs of the business.

Principle ten
Shareholder and stakeholder communication

The Board recognises that it is accountable to shareholders for the performance and activities of the Company and is committed to providing effective communication with its shareholders.

Significant developments are disseminated through Stock Exchange Announcements, Press Releases and Twitter at @Regency_Mines as well as Company Interviews, Broker Notes, Video Updates and Presentations, all of which are available on the Company’s website www.regency-mines.com, where the shareholders may sign up to receive news releases directly by e-mail.

Shareholders are also encouraged to attend the Company’s Annual General Meetings of which the shareholders are notified via Company’s website as well as e-mail or post, which is viewed by the Board as an important forum for communication between the Company and its shareholders.

The Company participates in the UK Investor Show and the other relevant industry investor shows, including Investor Presentation Evenings, for shareholders to meet management in person to answer their queries, provide information on the current developments of the Company and to take into consideration shareholders’ views and suggestions. The Company has held an open day for shareholders to visit the Company’s offices and gain an insight into the Company’s activities, and now that it is moving into the production phase has started to arrange mine visits. The shareholders also have access to the Company where the executive directors are available to answer investor relations enquiries via e-mail exploration@regency-mines.com or telephone on 02077479960.

The Board recognises that the long-term success of the Company also relies on good relations with other parties with whom it has business, as well as shareholders, and to understand their needs, interest and expectations, the Board expects the management to maintain ongoing two-way communication, control and feedback processes, so that appropriate and timely responses and actions can be implemented. All enquiries to the Company can be addressed by correspondents to exploration@regency-mines.com or by telephone on 02077479960, indicating where necessary the Director or other person to whom the enquiry is directed.

Results of Shareholder Voting
From the Annual General Meeting held 29 December 2017 at 2pm, all resolutions (which can be read in the Annual Report under Notice of Meeting)
The Company shall include, when relevant, in its annual report, any matters of note arising from the Audit or Remuneration Committees.