Regal Resources Inc.
CNSX : RGR

Regal Resources Inc.

March 14, 2012 09:00 ET

Regal Revises Continuous Disclosure

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 14, 2012) - Regal Resources Inc. (the "Company" or "Regal") (CNSX:RGR) announces that as a result of a review by the British Columbia Securities Commission (the "Commission"), it is issuing the following news release to clarify its disclosure.

The Company has received a letter from the Commission outlining the Company's failure to file technical reports on both its Patagonia and Squaw Peak properties in compliance with National Instrument 43-101 ("NI 43-101"). Furthermore, the Commission has requested that the Company explain how the author of its technical reports on the Patagonia and Squaw Peak properties is an independent Qualified Person (as independence is defined in NI 43-101). The Company has not yet explained this item to the Commission's satisfaction, and has decided to select another independent Qualified Person to prepare the reports with a view to rectifying and re-filing the reports as soon as possible. Regal is using its best efforts in endeavouring to have the new reports completed and filed with the regulators as soon as possible.

Squaw Peak Property

The resource estimate contained in the technical report on the Squaw Peak property did not comply with NI 43-101 because it does not contain, among other things, the following points:

(a) explanation of the determination of the average molybdenum and silver grades and in particular how high silver values were handled and an indication that there are unresolved questions about how molybdenum grades increase significantly compared to historical estimates when copper grade does not change. Furthermore, the report does not list a potential concern that the report estimates molybdenum grade of a current resource by including historical drill holes without molybdenum assays;

(b) description of tests or other procedures used to determine the tonnage factor of 12.5;

(c) explanation of why the cut-off grade of 0.30% CuEq is reasonable;

(d) explanation of why there is no constraining pit model, and in the absence of a pit model, how the report determined all parts of the estimate have reasonable prospects for economic extraction;

(e) explanation of why standard estimation techniques, for example variography and grade interpolation to a block model, were not applied;

(f) description of procedures used to construct manual polygon boundaries;

(g) explanation of the term "potential" in a resource with respect to polygon boundaries that extend up to approximately 400 feet from the nearest drill assay data and encompass areas labelled as "High Potential"; and

(h) documentation of data verification at a level usually required to support a current resource estimate as the report used apparently unverified historical drill data for parts of a current estimate.

The Commission is also concerned that quantities of contained metal in the resource may be over-estimated, because polygons include intervals below cut-off grade and appear to average all contained assays to estimate average polygon grade.

Accordingly, the mineral resource estimate contained in the Squaw Peak report is not supported by a compliant NI 43-101 technical report, contrary to NI 43-101, and should not be relied upon until it is independently verified and supported by a technical report. If the Company is not able to get this mineral resource estimate independently verified, it will retract the estimate.

Patagonia Property

The historical estimate contained in the technical report on the Patagonia property was not disclosed in compliance with NI 43-101 because it did not identify the source and date of the historical estimate or comment on the relevance and reliability of such historical estimate. The Company is getting an independent Qualified Person to re-write the report on the Patagonia property. Accordingly, this mineral resource estimate is not supported by a compliant NI 43-101 technical report and is contrary to NI 43-101. The Company is retracting this historical estimate.

In addition, additional items such as the Company's website and its corporate presentation are being clarified as they did not comply with NI 43-101. In particular, the Commission has noted that the Company's corporate presentation dated July 2011 on its website regarding the disclosure of historical resource estimates of 2B tons grading 0.34% copper does not comply with NI 43-101 because it is not supported by a compliant NI 43-101 technical report and is contrary to NI 43-101. The Company has removed all such references from its corporate presentation and is retracting this historical resource estimate. Furthermore, the Commission has noted that the Company's corporate presentation discloses a quantity of ounces of silver on a nearby property which was not in compliance with NI 43-101. The Company has removed all such references from the presentation, is retracting this reference and will continue to work with the Commission to ensure that its disclosure is in compliance with NI 43-101 and is not misleading.

The Company has been currently placed on the Commission's Issuers in Default list and will continue to be placed on this list until the issues noted above have been resolved to the satisfaction of the Commission.

Richard Kern (P.Geol.), a Qualified Person for the purposes of NI 43-101, has read and taken responsibility for this news release.

This news release contains certain statements that may be deemed "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change, except as required by law.

Contact Information

  • Regal Resources Inc.
    Drew Brass
    VP Communications
    604.730.0234