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Termination of USD5M Loan - Regal SK

The Directors of Regal Resources Limited (�Regal� or �the Company�) (ASX:RER) are pleased to announce that a Deed of Termination has been executed between Afrimines Resources SPRL (�Afrimines�) and Regal Resources Limited, extinguishing the USD5 million loan facility that was provided by Afrimines to Regal SK SPRL (�Regal SK�), a company registered in the Democratic Republic of Congo (DRC).

Key terms of the Termination Deed, which will cause to fully extinguish all loan amounts totaling USD5M are:

• Afrimines will increase its equity holding in Regal SK from 40% to 50% thereby reducing Regal�s equity holding from 60% to 50%;
• Regal SK will make a cash payment from existing cash at bank in relief of all accrued interest;
• Regal will maintain Board and management control of Regal SK and of its ongoing exploration activities;
• Regal retains the right to acquire a further 40% interest in Regal SK.

Regal�s Managing Director Mr David Young said �We are delighted with this outcome as it relieves Regal and Regal SK of a significant future liability which should be an important factor in a re-valuation of Regal�s share price. The agreement continues to highlight the continuing support and commitment that our DRC partner Afrimines has in the management and the belief Afrimines holds in the potential of both the gold projects controlled by Regal SK and in the advanced high grade Kalongwe Copper Project.   The Board greatly values the relationship it has with Afrimines.�

Background

Regal SK SPRL holds a 100% interest in a block of 14 exploration permits covering 1,970km2 in the South Kivu Province of the DRC. The permits are strategically located in an underexplored, emerging gold province, the Kibara Mobile Belt. Banro Corporation has delineated a reported 17Moz Gold in the same area Regal is operating in, and has developed two mining operations at Lugushwa (~5Moz) and Namoya (~2Moz).

Exploration results from various drilling and soil sampling programmes undertaken by Regal SK on the permits confirm that the permits have high potential for hosting multiple significant high-grade gold deposits which warrants a long term exploration strategy.

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