Member Info for Eloro

@hiblue, I didn't realise that I made you suspicious :)
Just trying to make sense of the situation. Hole 5 assay 6 months overdue; 10-days promise for hole 5 data given July 29 expired, and even the monthly meeting which we expected hasn't taken place since July 29th. I can only conclude that AA is in control, and that they regard the drill results as confidential and covered by both the NDA and the exclusivity agreement. NvS might have spoken out of turn and had his collar felt by AA is what I think. One hopeful thing from the Call, NvS praised frustrated investors for hanging in there. I don't think he would have done that if there was say a 10% chance of thr deal falling through, knowing how disappointed and upset investors would become. It would have been wiser to just keep quiet. So, I think everything is still in play, and I expect the temperature to start going up in October in line with Remy's next few months comment in the call. All IMHO.

GD, the Exclusivity Agreement was signed after several months of negotiations. So, the start date of drilling isn't significant in that regard IMHO. Further, we are all speculating regarding why the promised results are still not published after all the promised dates have come and gone with no publication. Finally, we haven't seen the text of the agreement, so we cannot state anything with certainty and are therefore only left with speculation. As Cattleman said, no news is good news.

Point taken Small_Holding. However, circumstance can warrant a change of plan on NvS' part. At the meeting, he promised hole 5 results within 10 days and they still haven't been published. AA could have subsequently said to him hold off publication, and he would agree. Nothing to do with misleading shareholders, but a change of plan which he hasn't had the opportunity to communicate to us. For example, NvS previously mentioned that hole 5 assay would be published 6 months ago, and we are still waiting. Having listened to previous investor calls, he promised a JORC, and we heard during the recent call Remy confirming that one would not be published after all. Point is, circumstances changed over time which warranted a change in what were previously promised.

Cheers Thefuturetruth, let us hope that by October we will have an interim update which will bode well for Christmas.

Posted previously that in my opinion that a transaction has already occurred and that the current drilling is the DD to finalise that transaction. The article supports this view. "Anglo-American has a variety of options available to it to CONCLUDE a commercial agreement, " A transaction would have to be already in place in order for it to be concluded. I still believe that the drill results will not be published because they fall within the exclusivity agreement NDA. They will only be published if AA give consent.

I am still thinking that AA will prevent the current drill results from being published because of the exclusivity agreement. I could be wrong, but my reasons are that the assay result for hole 5 was first promised 6 months ago before covid-19 took off. Even with covid, it shouldn't take 6 months to carry out an assay and publish the hole 5 result. Secondly, NvS promised hole 5 results within 10 days on July 29th. 1 month later, still no hole 5 assay result. I can only guess that publication is being restricted by AA.

@Small_Holding, I agree that NvS would not be allowed to consider an offer from someone other than AA while the exclusivity agreement is extant. He will be able to consider other suitors once the exclusivity agreement expires. That said, several majors have had access to Arc's dataroom before AA made their move. If one of those majors made an offer during the AA exclusivity agreement period, NvS could ask that major to wait; the competitive pressure on AA would go up and force AA to match/exeed the new major's offer. NvS said he isn't obligated to accept AA's offer, so he just have to say no to AA and wait, or AA could walk away thereby freeing Arc to move forward with the new major.
It is unlikely that an offer would come from a major who wasn't previously entertained in the Arc's data room, unless they love taking risks.
We haven't seen the legal text of the AA exclusivity agreement, so we don't know what the get-out clauses are contained in the agreement. However, during the call, NvS said that he couldn't consider the other approaches which he has received since he signed the agreement with AA. Therefore, it's safe to say there are no get-out clauses in the agreement which would free his hand until the agreement expire. I would love to see another major come forward now. The SP would catch fire for sure.

Hole 5 was first reported back in Feb. To date, the assay is still pending. I recently posted that AA might prevent Arc from publishing the current drill results. Some posters disagreed. I think hole 5 was the key to AA making its move, and I get the feeling that they don't want hole 5 ore grade published just yet. Now they are carrying out their Technical DD, they could ask for good data not to be published, and NvS would comply to maintain the relationship. Hence, I think all current drill results will be held back. Just my gut feeling and I could be wrong.

@Thefuturetruth, I for one appreciate your inputs on this BB. You are insightful, and I don't understand the ego accusation. Please continue to post because all opinions are welcome here. Eloro

I am with Thefuturetruth on this because I find his/her logic and insightful argument flawless. NvS want the company to be taken out. Why would he tie up the company for 6 months, thereby shutting out other majors, if he didn't already have a figure which he is happy with pending completion of the DD? I wish to sell my house and so I put it on the market. I am not going to shut out potential buyers by agreeing with 1 unless I have high degree of confidence that I will get my asking price from the buyer I am tied up with. Can AA be gazumped during the 6 months exclusivity period?

100% agree with your views on this Thefuturetruth. My sentiments exactly. Let us not forget that NvS slipped up and said AA transaction when what he should have said was the exclusivity agreement with AA. NvS brain was on the transaction, and he struggled very hard to find the right words so that he could honour the NDA. But, he is only human, and the word transaction slipped out.

The May 2020 Corp Presentation indicated that Arc has multiple Tier 1 assets. During the recent call, both NvS and Remy confirmed that Arc has multiple Tier 1 deposits. I don't recall seeing actual data from Arc which quantify the BODs view of what size of a deposit they regard as Tier 1. With deposits harder to find, that definition might change over time. However, Google indicated that 200kt pa is regarded as a Tier 1 copper deposit, and has a value in the range of $2B. Even without published size data, Arc would not use the term Tier 1 without justification. Plus, they had Consultants in who no doubt provided their opinion, and even pointed Arc to West Lunga.
AA is in the driving seat now, carrying out their Technical DD. They might decide not to OK Arc releasing new drill data to the market in the same way we haven't seen the actual data confirming Tier 1 actual size(correct me if I am wrong please).
Finally, Remy mentioned the next few months during the call which is regarded as 3 months. AA should be in a position to show their hand by October, and also the rainy season is due in November, which would limit how much field work can be carried out after the rain starts. Not long to wait IMO given that the BOD already know that the Co has multiple Tier 1s.

This item provides some info on the treatment of warrants in the event of an acquisition :
https://www.lawinsider.com/clause/treatment-of-warrant-at-acquisition

With prospects of the company being acquired by AA, I expect all outstanding warrants to be exercised before the deal is finalised. Those who do not exercised their warrants run the risk of those warrants becoming worthless if:
-The takeover price of the Co is lower than the price of the outstanding warrants (God forbid).
-AA decides not to recognise those warrants as being outstanding after the deal is executed.
So, no one will take the risk of holding warrants which could become worthless. Hence, I expect to see a lot of RNS's notifying the market of outstanding warrants being exercised the closer we move towards a deal.
No cause for worry or panic.

Analysis of the following NvS statement during the recent investor call "..so, I couldn't be happier. This is probably the most rewarding episode or incident that we've been able to report to shareholders over the last 2 years, and I think we are on the cusp of something very exciting." We know that he doesn't believe that focus should be given to the SP in the short term. So, what does he mean by happier, rewarding, something very exciting? I can only conclude that he already know that a sale has already been executed. No other reward would be accepted after 2 years of shareholders waiting. 6 months is not a lifetime, I can wait for that exciting reward.

I admit Artyth that I had to listen to the call several times to detect the NvS transaction comment. An agreement is not a transaction. It's just parties arriving at a consensus. A transaction is specifically to do with buying and selling. PIs might not have noted the change in reference made by NvS. All I know is that he is way too savvy to have made reference to a transaction unless excitement got the better of him which is what I think happened. Ordinarily, he would be tight lipped. Only an actual transaction would have gotten him so excited, and he already know he would be criticised if nothing came out of his involvement with AA when he praised investors for hanging in there. Best of luck all.

Cheers Artyth,
Let's hope that we are not far away from the final outcome. I too noted how excited NvS was. That was out of character for him.
Finally, Teachers Pension Funds are extremely risk averse. We have 1 here which speaks volumes regarding where Arc is going.

NvS began the call by referring to the "Exclusivity Agreement." Further on he said "thats what I'll say on the Anglo-American Transaction." He also praised frustrated investors for hanging in there. To me, there is a world of difference between an agreement and a transaction. The 2 terms don't mean the same thing in business speak. A transaction imply that a sale has already been done, and we are now going through DD after several months of negotiations. Finally, why praise investors for hanging in there if the possibility exist for a no deal?

In its May 2020 Corporate Presentation the company declared that it has a Tier 1 asset in Zambia. True, the full scope of that asset is still being defined, but I don't think they would have used the term Tier 1 without justification. A deal will come from this agreement in my opinion, otherwise AA would have waited longer for more data before entering into the agreement. Patience.

No update on drilling. I am guessing the silence is not due to JV discussions. If that was the reason, drilling would have started already. Why delay drill to discuss a JV? The main reason for not starting drilling would be if the discussions are about selling the business. No point starting drilling if there will be a new owner shortly. The window for drilling is limited, so the company would want to make good use of that window and would drill while JV talks continue given that the targets have already been identified. A sale is more likely in my opinion.