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They seemed to think we were cashed up to production from CE in the investor calls.
I appreciate there was then the infamous 'placing' (now to be referred to as placegate) for the Botswana deal that was dangled but they seemed confident they have sufficient reserves ATM.
Also, they surrendered their warrants and ceased all future director issuance of warrants, as to avoid shareholder dilution. Even more aware after the aforemention placegate shenanigans.
I'm not saying a further capital raise won't happen, just that they seemed to be comfortable and they know it'll have to be for something pretty meaningful.
Anyway. Near term, we await the big reveal.
ATB gla
Thanks both,
Having looked again it I agree these warrants haven't necessarily been exercised. However, there appears to be a discrepancy of 26,784,523 shares in issue between the RNS 24th Mar and 7th May, I assume these are part of the warrant block listing. I can't see anything that shows any additional shares but not sure how to see an up to date list of shares in issue. I agree the Broker costs have to be accounted for in the operating costs of the company. I guess if the 27m shares that I am assuming were converted warrants were director warrants, and were not sold, then we would have had an update in director holdings?
I wonder if this is fatboy1nc's Mr 250k.
Hi Ella,
Ive just gone through the cash position also like you and with regards to the Block listing on 23rd of Feb it appears that these have not been issued yet and as such no consideration has been received. The note below the table in the RNS reads:
'The New Ordinary Shares may be issued from time-to-time pursuant to the exercise of existing warrants. If and when issued, the New Ordinary Shares will rank pari passu in all respects with the existing ordinary shares of the Company.
The Company will make six-monthly announcements regarding the utilisation of the block admission.'
My working out on the cash position are very much inline with your first post however however I have deducted 10% of the gross proceeds from the placing to cover costs which gets me to a 9 month spend of £1.6m which I think is about right looking at previous cash burn. As with you happy to be corrected.
Ella they are options, expenses are largely £2 - 3m a year, but with acquisitions this will be higher this year. But with Casa we should see some cash this year I interpret as $5m. I hope the board really focus on the monies for the mine next year and getting this up and running.
I would be grateful if someone was to check my calcs as a £10.75m spend in 8 months doesn't seem to align with £3.8m in the bank and fully funded to the end of 2022...
I just realised a MAJOR omission from my post below. I missed the fact that the 23rd Feb RNS included a block listing and that together with the option exercise is an additional £8.55m. This means our 8 month spend was approx £10.75m !!!???
Please feel free to check my calcs and correct any errors.
Ella, I expect there will have been some payment this year though. As it's being spread over the next few years.
That said the general principle behind the surrender (as I'm sure youll know) was to reduce dilution. I like it to a small share buyback. They also advised that they won't issue more share options to management going forward which is good.
They should be cashed up now so either way I'm not concerned. If cash got lower, or free cash flow from Cheyeza East plant got delayed then I'm sure they would prioritise company over the share surrender payment. I don't think it should come to that though. We may get a deal with a major between now and then..
Anyway for anyone unfamiliar here is some of the detail extracted from the share surrender RNS:
'In lieu of this surrender, the share option holders will be compensated in line with the Black-Scholes fair value model, using a 10-day VWAP of 6.94p through cash and / or shares to be issued at the Company's discretion to a total value of £3,474,179 ("Consideration"). It remains the Company's priority in respect of the surrender of options not to issue further shares to management thereby avoiding diluting shareholders' interests.
In order to protect the cash resources of the Company, the compensation schedule will be phased over the next 3 years at the Company's discretion ("Payment Period") and which would coincide with the expected cash flows of the Company's planned Cheyeza East plant.'
Hi F79,
No money has changed hands for the Botswana licences yet. Yeah presumably some of the spend was for drill and soil sample assays, possibly some for drilling, concept/scoping study work, general overheads (salaries, broker fees etc).
I'm not sure if Rothschilds will have been paid anything yet - we were told via the IC that it was a success based fee but I don't believe any of the RNS specifically state what they have been appointed for.
Hi Ella
Perhaps cash burn (general opex), exploration costs (drill / electromagnetic / result analysis), not sure if any money swapped hands for Botswana at this stage can't recall but possibly not.
KR
The following is likely to have errors in it so feel free to correct. My interest was piqued by the fact that our cash and cash equivalent postion was quoted in $ this year whereas last year it was quoted in £ and didn't appear to include a cash equivalent.
Cash on 30th Sep £1.25m
Placing 12th Jan and 24th Mar £3.8m gross
Option Exercises and block listing £940k ish
Total £5.99m
Cash position and cash equivalent end May $5.3m (£3.8m)
I haven't accounted for the convertible loan note and have assumed the Casa Loan was not counted in the cash equivalent but am not sure that this is the case. So a £2.2m spend between End of Sep and End of May?
Some payment for the surrender of director options may have occurred.
Exactly my thoughts , i wouldn't mention the possibility of a deal with AA either , private investors are not the only ones who read RNS's , if AA read the RNS maybe they think , " hang on they didn't even mention the possibility of a deal , are we going to get this company or not "
Also if ARCM keep bigging up a deal to shareholders then AA think they can play it tough because ARCM have virtually promised it to keep scared private investors happy.
Chill and don't sweat the detail.
I find the emphasis on Covid-19 quite interesting, in today's RNS.
Yes, it has to be mentioned because it is the cause for delay of the financials.
Quote from RNS:
"As has been widely reported, Zambia is currently undergoing a major COVID-19 wave of infections which has had a wide-ranging impact on large sections of the population and on various businesses. Arc is taking every precaution to ensure the safety of its employees and contractors."
It seems to me that the company are very keen to paint a detailed picture on the negative impact of Covid. Call me a sceptic, but I have the feeling someone wants your cheap Arc shares.
Instead of emphasising all the great reasons to own this stock they are doing a great job of talking down what we have got.
Ok they mentioned upcoming drilling and our strong cash position.
However, I would be constantly mentioning the Sturec and Casa potential cash values. The high price of Copper and great outlook for future demand. Also, the near time potential for cash generation from a very low capex high margin production facility.
Also, I would keep mentioning the fact that there are other interested parties waiting in the wing if AA do not come up with the goods.
There are so many more positives that could be mentioned. Our current cash position and potential for near time cash generation mean that we hold all the cards. AA or anyone else can try and bluff but that strategy will not win this game.
In conclusion: I think games are being played and I have no intention of selling Arc at such a bargain price.
GLA DYOR Sharegar.
I’m not counting on those. Not sure there is anything due from Sturec. Casa - we’ll see. The key thing in the RNS is the drilling start. Good news from that and the game changes.
Not seen anyone mention one of the main points of the RNS --"Arc's liquidity position is strong, with cash and cash equivalents exceeding US$5.3m as of 31 May 2021."
with cash also incoming from Sturec and Casa we are solid!