Why I'm optimistic...30 Dec 2020 16:59
Dilution has always been a focus of mine when considering investments particularly in mining. (Beyond the obv other factors).
ARCM have around a billion shares in issue and fully diluted sit around (a little above) 1.3billion. This and potential capital requirements to continue on the exploration, development and production curve have always been a concern for me here. That's changed a lot in the last year and is why I've now built a fairly good position.
We've seen a much more focused delivery imo. The sale of non core assets achieved in sturec and casa providing some further capital down the line, and possibly most important is the recent RNS detailing a 12 month timeline to initial production for Zamzort.
This has comforted me in regard to being able to understand how ARCM can achieve a reduced dependency on capital through dilutive share raises.
NvS clearly acknowledges this when he said 'Capex requirements are minimal and likely to be financed by offtake agreements or asset-backed lending'.
In terms of shareholder returns the EA with AA, may be a blessing or a cursevand may or may not end up in a commercial transaction.
We have a variety of roads in front of us and from what I can see NvS is pursuing all of them, without being blinkered. From what I can also see he won't give it away and is strengthening our hand as much as he can.
I'd rather have no commercial transaction than an overly dilutive one at company or project level tho.
Not long now and we will know I guess but even if AA walk away its not dreadful. I suspect a form a JV for further exploration is most likely though.
With any outcome I see a path to production, lots of newsflow and an increasing shareprice over the next year. Let's hope so.
Atb all.
F79
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