RE: rns5 Nov 2019 11:28
SP Angel Update: STRONG BUY
Arc Minerals reports further near surface high-grade copper intersections from drilling at its 3x0.8km Cheyeza East target in Zambia.
The results are excellent with >75% of holes drilled at Cheyeza showing decent grade copper mineralisation.
Hole 47: 20m @ 1.44% copper from 34.50m down hole
+ 11m grading 1.41% copper from 52m down the drill hole
inc. 5m @ 3.67% copper from 34m and 5m @ 2.46% copper from 52m
Hole 49: 14m @ 1.20% from 38m
inc. 7m @ 1.78% Cu from 44m
Hole 51: 14.50m @ 0.93% from 17.50m
inc. 1.36% Cu over 7.50m from 18.50m
Hole 27: 15.50m @ 0.62% from 44.50m – drilled to test extremity to the west of the high-grade core
inc. 3m @ 1.51% from 46.50m
Hole 45: 10.74m @ 0.61%from 74.50m – drilled to test extremity to the west of the high-grade core
Drill holes 47, 49 and 51 are drilled into higher grade mineralisation in an area estimated to be 250m x 250m at Cheyeza East.
Assays have been received from SGS Inspection Service Ltd in Kalulushi, Zambia.
Previous high grade holes include:
Hole 4 – 2.35% Cu over 18.00m
Hole 5 – 1.32% Cu over 28.50m
Hole 23 – 0.95% Cu over 17.00m
Hole 25 – 1.27% Cu over 32.50m
Holes 27, 28, 38 and 45 were drilled to test the extremities to the west of the current high grade core and appear to show economic grades of copper mineralisation despite being not quite as thick as seen in the high-grade core.
Hole 30, 32, 33, 39 and 44 were drilled to test the extremities to the south east of the current high grade core.
Holes 46 and 48 were drilled to test the extremities to the north west of the current high grade core, indicate the grade and thickness of the mineralisation in this area of the prospect are lower in grade.
Recommendation:
We recommend Arc Minerals as a STRONG BUY due to its potential for a major copper discovery at Cheyeza East in Zambia.
The potential value of a significant copper discovery is likely to be a significant multiple of Arc’s current market capitalisation.
We expect the market will recognise the value of the Cheyeza East discovery on the publication of further drill results and resource estimation.
Other significant discoveries in Zambia in recent years include Sentinel in 2014 with 939mt grading 0.49% copper just 40km away from Kalaba and is producing >190,000tpa of copper.
Lumwana which is 100km to the east also has a reserve of 758mt grading 0.51% copper and is producing >116,000tpa of copper.
Conclusion:
Arc Minerals is working hard to evaluate the value of its exploration portfolio with minimum dilution to shareholders.
Management recently reported on its first commercial sale of 15t of copper concentrate from the Kalaba process plant which serves to substantially de-risk the project from an investor perspective and brings some cash flow into the business. While the sale of 15t of copper concentrate should net something over $80,000 it is a first step toward significant cash flow if
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