focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Anyone know who the 3 Anglo directors on the JV are?
I assume one of them is Adriana Blesa, Discovery Manager for Zambia.
See https://www.langmead.com/?p=4920
The others?
PS I emailed both AA and Arc about this. Not even the courtesy of a reply from AA. From Schirnding a curt note to say the JV is a private entity, and therefore not obliged to release any public statements.
Really don't know what to think.
I would have imagined that a lack of any statement regarding an extension by now implied that one had neither been sought nor given.
And that the shares were therefore cancelled, as the 6 month limit had been passed.
However, if that had happened, presumably an RNS would be required to state that?
Or is it that they are so broke that they can't afford to tell us either way?
[ Note: the site londonstockexchange.com still lists them as 'suspended'. Is that positive? ]
"when it comes to AIM, should the securities of any company be suspended for six months, the securities will be be cancelled from trading unless an extension has been granted." From https://aim-watch.com/
So I guess there'll have to be an announcement one way or the other before the end of the week.
On 31 Oct 2023 12:26, I posted the following (see below). Take as you will.
(I guess the reds won the day.)
***************************
"... today should see a substantial gain with a steady climb up to double figures between now and Christmas ...", TakeNoRisk below.
Well there's a testable prediction.
In the blue corner, Fulmar, Seisnav and the rest. In the red, peggycilla, NorEsco and their crew. 15 rounds, the last on 24th December.
If the s/p has reached 10p, the blues have it. If it's still at 3.5, oops.
Perhaps we can call a halt to this board's Rumble in the Jungle till then?
[ For what it's worth, based on past performance, I'm sadly leaning towards the reds. ]
"MMG seals $1.9bn deal to buy Khoemacau copper mine in Botswana. Adjacent to Arc’s licences ..."
Memo to MMG. Up your offer by 10% and gobble up Arc's bit as well.
Bargain - you get deal-of-the-century in Zambia thrown in for free. (A few Tingo shares as well. Hmmm.)
$190m = £152m = 3.5 * Arc MCap.
11p a share?
For those new investors thinking this share is on a permanent 'melt-up', a note of caution.
These are max and min prices for every year going back to 2016 (data from digitallook).
2016 Max: 5.00 Min: 2.00
2017 Max: 5.12 Min: 2.00
2018 Max: 5.77 Min: 2.02
2019 Max: 5.10 Min: 2.06
2020 Max: 4.60 Min: 1.27
2021 Max: 8.90 Min: 2.16
2022 Max: 6.10 Min: 2.18
2023 Max: 4.90 Min: 2.28
What good news led the s/p to rise each year to 5, 6, even 8? What disappointments led it back down to 2?
But this time it's different, you say. Deal-of-the-century. De-risked.
Well, the market doesn't think so. Yet. This is AIM. This is African mining. What could possibly go wrong?
Hi Steve4077
Great post and calculation. But I would contest one thing.
Let us assume the JV finds a Tier 1 deposit. However, it may not find it until, say, 2 years from now - 2025? And when would production start? 4-5 years further on? 2030?
Now NPV (call it N) is calculated on the basis of this year's profit (P), plus next year's discounted, plus the following year's discounted twice, etc.
A reasonable discount rate might be 8%, so the discount factor (d) is (1 - 0.08) = 0.92. So N = P + d.P + (d**2)P + (d**3)P + ... in perpetuity.
If N = $2b (as you say), this gives annual profit of $160m. However it may be a bit higher, since the mine has a limited life span, say, 20 years, so giving about $190m.
The problem is, the first year of profit would be 2030, 7 years from now. So we need to factor in that the income stream may not start for years to come.
So the calculation becomes : N = (d**7)P + (d**8)P + (d**9)P + ...
If we let Q = (d**7)P, we get N = Q + d.Q + (d**2)P + (d**3)Q + ...
Same equation. BUT everything is scaled down by d**7 = 0.56. This equates to an NPV of 0.56 * $2b = $1.115b, or a s/p of 14.9p.
Some might call the above discount factor generous. 10% or 12% might be more appropriate, given production is so far in the future. A 12% discount factor would give a s/p of c.10.9p.
10p is what some in the past called a good buy-out price for ARCM - and if it reached that price tomorrow, I'd certainly be happy.
But whatever your view, it is the difficulty of long term prediction which makes these guessing games so conjectural.
My take is that, while there may be share price spikes in the short term (FOMO), there won't be consistent price rises until significant finds are made and proved up, perhaps a couple of years from now. And this assumes no black swan event, which is always possible with AIM miners in this part of the world.
And given that I am extremely wary of the current management (see earlier posts), I'd say this was not merely possible, but likely.
I might also ask, has anyone figured out the outstanding costs owed to Rothschild and the other advisors?
And, has anyone identified the AA board members of the JV?
If their names are being kept secret, one has to ask why? These people presumably have public profiles on LinkedIn, they may appear on the AA website or on YouTube conferences. Why so cagey?
Then: There. Will. Be. No. Fundraise.
Now: "Arc ... has issued 5,593,099 new shares" to raise funds "... as consideration to certain creditors ..."
Is the top line just a bare-faced lie?
We note also that ARC will NOT be the recipient of $3.5M. Instead it will be due 67% of that, about $2.3M.
I've been in this share since 2017. On the 29th March of that year the share price reached 4.50p. Doesn't even the most ardent supporter sometimes wonder, if this is "the deal of century", why is the share price still so low?
Schirnding has a relationship with truth similar to that of Boris Johnson - tenuous at best. The market is the ultimate arbiter of value. And the market is just not convinced.
"... today should see a substantial gain with a steady climb up to double figures between now and Christmas ...", TakeNoRisk below.
Well there's a testable prediction.
In the blue corner, Fulmar, Seisnav and the rest. In the red, peggycilla, NorEsco and their crew. 15 rounds, the last on 24th December.
If the s/p has reached 10p, the blues have it. If it's still at 3.5, oops.
Perhaps we can call a halt to this board's Rumble in the Jungle till then?
[ For what it's worth, based on past performance, I'm sadly leaning towards the reds. ]
To those attending the Webinar (I won't be able to) ... if anyone has the opportunity, I'd be grateful if you could put the following questions to ARC :
- Who are the three Anglo American appointees to the JV board, and what are their profiles/qualifications?
- Who will be the CEO of the JV?
Many thanks
Anyone want to review the following maths?
- In these workings, assume there are 100 shares (or 100 equal 'tranches' of shares).
- Mulligan currently owns about 6, and will receive x new shares after the debt-for-equity swap.
His holding is then (6 + x).
- The number of new shares will then be (100 + x). Mulligan will own 30%, or 0.3, of the new total.
- So (6 + x) = 0.3 * (100 + x) [ i.e. 30% of the enlarged capital ]
=> (6 + x) = 30 + (0.3 * x)
=> 0.7 * x = 24
=> x = 240 / 7 = 34 (roughly)
- So shares roughly go from 100 to 134.
That's an increase of about one third. Or - existing shares (inclduing our own) will be three quarters (100/134) their previous value once the total is enlarged.
If that's the case, it's not total wipeout.
I would say it's not too bad a deal for retail investors IF the plus side is that company remains afloat.
Any thoughts?
Someone asks, why the S/P fall?
With the greatest respect, isn't it obvious?
- Earlier this year, we expected a finalising deal on the JV. Eventually, on 20 April 2023, a deal was announced which was anything but finalised.
- Last year, on 12 May 2022, the initial exclusivity arrangement appeared in an RNS. There were to be 90 days for due diligence, a further 90 days for execution of the JV. 6 months in all.
The deal-which-was-not-deal was announced almost a year later.
- On 20 April 2023, we were told it was weeks before the deal-which-was-not-deal would be completed. It is now October.
It's nothing to do with MMs or MACD or TA or Fibonaccis.
Quite simply, the market's lost faith.
AIM mining - especially African - is the retail investor's graveyard. Anything that can go wrong - legal, political, commercial, geological, act of God - probably will. The market knows that.
My one bright hope is that the 3 Anglo nominees for the JV have some nous, will wrest control from Schirnding, and pull the whole thing together.
If the market sees competence, the s/p may - just may - begin to rise.
Https://www.investmentreports.co/article/nick-von-schirnding-ceo-arc-780/
" ... we can act very fast once we identify new opportunities ..."
Ah yes, veritably the Lewis Hamilton of the mining world. Blink and you missed it.
(Er - did it ever arrive?)
I might add, just what do the optimists expect in the near term? Once CPs are met (whatever they are - does anybody know?), the Cadastre issues resolved (asssuming this happens before the end of the century), what changes?
The JV still needs to be set up, staffed. Drilling infrastucture needs to be commissioned, then utilised.Drilling results examined, assayed, JORC estimates published, etc
All this may take years.
(Some of us naively assumed it might have been done half a decade ago.)
Sigh. If only there had been a straight sale ...
The bulls on this board assume that all those expressing negative opinions, first, have no holding in ARCM and, second, are acting for 'nefarious reason(s)'. Absolutely not the case for me.
I have built up a substantial holding over the years since 2016. My doubts spring from frustration at the delays, and anger at the misleading news flows. Seven years of it.
If things turn round tomorrow, great. About time. I doubt they will.
Von Schirnding has stated somewhere that share price is not important. 'Let them eat cake', you almost hear himn saying.
Well, it is important to me.
My main hope at present is that if - when - the JV is incorporated (the board will have 3 AA nominees, 2 from ARC), the CEO will be an AA placement who's tough, no-nonsense, and reports directly to the AA board - someone who can lay out clear, achievable milestones and then work, step by step, to accomplishing them.
If that happens, even if significant finds are still a couple of years out, confidence will return and the share price will rise.
Prior to 20th April, I was totally in agreement with those irritated by peggycilla and her incessantly negative comments.
Since then - and the completion deal that completed nothing - I find myself agreeing with her every word.
She suggested a while back that AA "will make a move for the lot [whole company] on the cheap" if the share price continues to drop.
Well, Halleluja if that happens.
Question becomes, at what price?
10p+ Can we dream ... ??
8-10p, OK, reasonable return, though not as much I hoped 6-7 years ago.
6-8p, Well, better than nothing, though worse than had I invested in an S&P 500 tracker. But at least I could realise cash, clear slate, move on.
< 6p Disaster, though I can't see this happening (despite the fact that 5p is at present a 100% mark-up).
But, whatever, at least I wouldn't have to endure another conference call from a certain snake oil salesman ...