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Regency Mines completes 1st phase of exploration on Lake Johnstone Greenstone Belt

Regency Mines (AIM: RGM) has completed the first phase of its exploration programme in the Tay Munginlup sector of the Lake Johnstone Greenstone Belt in Western Australia. In the Phase I exploratory aircore drilling programme on the E74/318 area, Regency completed 2,401 metres of drilling in 51 holes at Targets 1 & 3.

The drilling programme’s aim was to test three targets which were identified previously through airborne electro-magnetic (NYSE:AEM) and one magnetic exploration. The programme attempted to define contact zones between the Archaean Craton and the Proterozoic Albany-Frazer Complex – AngloGold Ashanti's (LSE, ASX: AGG; NYSE: AU) 5 million ounce Tropicana deposit is hosted in this ancient collision zone.

Regency said that the programme successfully completed its objectives, and the exploration work will provide specific target zones for further follow-up work once all assays have been returned. It is submitting 779 drilled samples for testing upon the exploration team’s return to Perth.

Regency said that Target 1 has a geological profile similar to Tropicana, and the exploratory programme outlines the existence of a potential SW extension to a similar conductor along the same structure in the neighbouring Anglogold Ashanti tenement. At Target 1, sulphides associated with gneissic-migmatitic rocks, schists and shales were visibly detected in 10 drill holes.

Target 3 drilling outlined a zone of the Greenstone Belt in 13 drill holes along 1 kilometre of strike under approximately 30 metres of cover.

Initially the preliminary exploration drilling programme had planned up to 3,750m in Phase 1, however the smaller Target 2 area xcould not be be tested recemnt rains made the area inaccessible. Regency noted that Target 2 was the least significant of the three targets and it was decided to conclude the programme rather than keep the drill crews on standby.

Regency considers that the initial drill work has enjoyed technical success and proven the electromagnetic and magnetic anomalies to be associated with visible sulphides. Once all assay results are to hand, Regency will determine its follow-up work for 2010 which will use on-ground geophysical surveying combined with RC drilling.

Last week, the company reported a pretax profit of £388,164For the six-months ended 31 December 2009, compared to a £1.4m loss in the comparative period in 2008, and said it is loolking ahead with confidence.

The company owns almost 30% of Red Rock Resources (AIM: RRR), and this investment contributed £634,001 to Regency in the half-year period. The strong financial performance was also buoyed by a surplus on the revaluation of available for-sale financial assets and exploration properties.

Disclosure: The author holds no positions in the company