Member Info for Fukurokuju79

Grenade,

....'the $3.5 million doesn't go to Arc minerals does it, 67% of it goes to their subsidiary.'

No it all goes to Unico and ARCM get 67% of that as they own that much of the JV with Kopara.

Regarding capital concerns I covered that in my other posts but ultimately ARCM have never had greater capital certainty. That doesn't mean they won't strategically raise but any exploration company are bound by those factors.

Lol Bozi. Fair enough 🤣👍🏻

It's not a unique situation for exploration companies. It's a given that they will need to rely on capital raising.

However the deal with AA is amazing and the whole deal does nothing but strengthen the financial position for ARCM. What with the cash payments and the free carry.

Atb

Regarding how ARCM fund other stuff like bots or other acquisitions I think (from memory) the cash payments to the JV total about $14.5 million with the first $8.5 being payable over the first 3 years.

So they will use that, rollover the share options and short term payables. They haven't a plan for a raise imminently but obviously it's possible they will at some point especially if they pursue acquitions. No one can rule that out of course. However, I'd hope they plan to do that on a bit of a higher base price.

Atb

Bozi when you say 'But the point I'm trying to make is that Unico will likely needs funds to contribute towards the JV (maybe not initially but at some point). So in the meantime, how does Arc pay the bills?'

The JV is a free carry for Unico. AA have commited to a shed load of drill spend to earn in up to the 70%. It only becomes a shared money problem at point of discovery and development, but that's a future situation and one I'll be happy to see happen personally..

Atb

Grenade,

AA have the ability to earn in up to 70%. If they spend a load on drills and they make staged cash payments. As detailed in the original RNS. So the remainder stakeholders will have the residual 30% interest. (arcm/kopara). Obviously the 30% Vs AA 70% is only if AA meet their agreed capex.

The 30% held by ARCM and Kopara is in a JV (Unico) which ARCM own 67 of and 33 Kopara.

So at a Zambian asset level AA will eventually hold 70%, arcm 20.1%, Kopara 9.9%.

Any cash payments made by AA go to Unico, which is distributed proportionally to ARCM / Kopara.

Atb

I don't think there is anything really to work around. Effectively kopara and arcm don't need to worry about the Zambian assets now AA are at the helm. They created the JV simply as a mechanism for the deal.

The cash payments will be distributed to the JV and the JV parties will have a clear understanding of the 67/33 split.

Its possible arcm could even approach kopara for a commercial transaction for more of their pie. However the structure is very clear, to my mind.

Atb

It's not complicated. The cash is distributed proportionally to the shareholding in the JV.

There is no elephant in that regard.

Atb

What's the elephant?

And that's a wrap....

😄

Tomorrow...? Thurs....? Fri....? Or beyond..?

Place your bets..must be close now!

Yes, no doubt this is happening. Crews should be drilling 24/7 and possibly have multiple rigs at it now.

Re cash position they will get their portion of the circa 2.85 million GBP very soon. So around 1.9 million GBP to ARC. NvS said up to about 10 days so should be imminent / within the next week.

Clearly they are drilling several times our previous depths and they have at least another month and feasibly longer if they can move around site with the improved roads into rainy season.

Ultimately, it's in a really promising place. Sounds like they may use some of the cash for another yet to be confirmed asset. I'll hold judgement on this until we know more. Although I would personally prefer ARCM aimed to focus on retaining cash for company opex and capex at Bots, while AA go at Zambia.

Certainly until a decent rise in sp to minimise future dilution for any strategic acquisitions etc. Obviously we have staged cash payments but financial prudence is preferred for me until stock is priced higher. No need to empire build too fast.

Atb

Hi Seis, I can't say with certainty but I'd be surprised if the JV (part owned by ARCM) didn't fall within the separation agreement for Kalaba. At the least I'd have thought any agreement would have covered off ARCM not gaining access to the licence either directly or indirectly. As in ARCM also can't be a connected party.

Anglo could acquire it, but I'd anticipate ARCM not being a party to that area inside the JV vehicle. It would be a fairly lame separation agreement if this wasn't covered. IMO.

Yes the 5km is a fair and reasonable agreement. A welcome addition to the complex details they have thrashed out. 👍🏻

Yes I thought the same APR re Kalaba and obviously it's in the covenants that we can't have that in the JV.

I also agree with you additional context Seis about the JV Vs going it alone. In regards to the relinquishments and upscaling of some exploration licences to mining licences.

There are many reasons I think the JV is better than going it alone. Despite the reduction at project level.

Also yes, it's great to hear decent debate and views without it being argumentative or derogatory in nature.

Atb

Kully

'After all, 2.5 years later we would have spent nearly $20m+ by now on drilling, just the same as AAL, are about to commence. So we arrive at the same time as AAL, but with all of the license. Sadly that's the truth about Arcm and nothing has changed, apart from the continuous bickering.'

Trouble is raising capital In these markets has been challenging. For arcm to have raised that much drill capex would have probably resulted in a greater dilution than going with AA at project level and we wouldn't have the skills and knowledge and future commitments (cash and the other 50 million commited spend) that AA have agreed.

That's my view.

Atb

Believe they said we are currently drilling in Cheyeza Finch . AA are at about 100m now and will provide more details on wider campaign; Vas is meeting with them on this today and over the week before heading to Bots next week.

That AA will try to go into the wet season and are improving road infrastructure for ability to mobilise and move rigs to the target areas. Certainly until early Dec (when arcm have and to stop historically ) and hopefully beyond with the improving roads etc..AA will mobilise multiple rigs and drill across multiple areas, targeting deeper stratigraphy than arcm have historically.

Assays won't be performed by AA as you can't mark your own exam paper so will be sent for independent analysis.

Awaiting due process for approval on the 3 LMLs applied for as clearly this shows intent to develop the assets and removes the relinquishment requirements and renewal requirements of exploration licences. LMLs allow for 25 - 30 years. Anything within 5km of JV boundaries are offered to JV first, anything beyond 5km can be independent.

Bots assays and activity impacted due to reserving capital while this deal concluded. Payment expected within 10 days to Unico and allocated to ARCM/kopara respectively ,(67%/33%).

No intention for a raise at the moment, PDMRs will be rolled over as needed.

Looking at other options in SA region and profile raised by concluding this deal.

Ultimately, a good call emphasising the quality of this deal and AA as partners. Nothing massively new but good context. Pretty happy to hold and wait now for AA to do their thing.

Atb

Totally agree about the MMs post there Trek.

All in good time and shouldn't be too long here now before a significant move up IMO

Atb

Noresco, just wish holders well now the deal many doubted has been confirmed and the drilling that will take a year to mobilise and get through wet season has started.

As for see you in X years when things are still going slow. That's the beauty of the AA deal, they've committed sognificant spend on drilling so it can't be slow.

Let's just enjoy the process. It's going to take a bit of time to discovery, but I'm more than happy with the fact it's AA leading it and spending their own dime. Way way more than arcm have spend altogether to date, ad nauseum.

Just best to stay humble isn't it?

Atb

Nothing else to say......and there it is 😜

Plus drilling started is a great addition and shows the intent and enthusiasm many on here believed AA had but couldn't prove. I think this removes a lot of ambiguity that's been the source of disagreement on this board.

Hopefully I can make the webinar for greater context on plans, and this board can move on based on the facts.

Be humble, but it does feels good !

Atb

Well a placing all depends on restructure of the liabilities and the strategic / bits plan. It's within our control tp restructure and renegotiate short term liabilities.

I'd say we have the agritech stock we can sell but that's ok the window ATM really.

I expect if they raise it will be after closure with AA and in the event they take up an option on another opportunity.

For now we can't forget the cash element of the AA deal alone is 14,500,000 usd. So the 66% (currently) attributable to ARCM is 9.57 million USD. Using a conversion rate of 1usd being equal to 0.82p then it's £7.847 million due to arcm by the end of phase 1 which is over 3 years.

Although think it's actually 67% but won't rework the math for that.

Atb