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“The Company has received expressions of joint venture interest for the Mukai Project which are now being considered.”

Another JV on the cards, most likely with neighbour, First Quantum.

Https://tinyurl.com/mpa5wme5

I found this satellite image which shows very clearly the drill sites on license PL135/2017 in Botswana and also shows the drilling done on the Khoemacau license which is adjacent to it. The drilling area on the Khoemacau area is now referred to by them as Mawana Fold, "new discovery". Do you think they will be interested in our assays? 🤔😁

Thanks to all the attendees at the AGM for sharing your notes. I must admit to being very disappointed in the last RNS for several reasons but mainly the lack of progress with copper production. It’s good to understand that this is more of a mechanical issue of mixing slurry with hard rock, rather than a problem with the process flow sheet. I do think they shoot themselves in the foot sometimes by not acknowledging the issues in the RNS. Unless you happened to attend the AGM or read information from someone who was then you are left in the dark, wondering what exactly has gone wrong.

I hope that going forward they report on copper cathode and copper concentrate separately, I’ve seen mention of “copper”, “copper cathode equivalent”, “copper cathode and concentrate”. Standardisation of reporting needs to improve to avoid shareholders having false expectations.

Looking back to the Dec. 2021 broker note I found that:

Copper sulphide concentrates are typically 27-30% copper

Roan ROM was expected to be ~ 72% copped cathode and 28% concentrates.

Using the average copper price for Q1 and plugging in 27% copper in concentrate and the 72/28 ROM split I came up with a revenue per tonne of US$6,600, against the reported value of US$6,588.

The expected split for processed tailings at Roan was 36/64, so a much higher sulphide concentrate percentage. Just reporting tonnes of copper doesn’t paint the full picture so I think it’s important that they report the two products separately.

With little or no copper production in Q2 I’m certainly not expecting fireworks in the Q2 numbers but looking to the second half of the FY things sound much brighter, with (fingers crossed!) copper finally starting to be produced at scale and the ramp up of Thutse chrome and PGM’s.

I wonder if project ‘M’ is for Mopani? We might see more news flow from that area once the Mopani sale finally completes.

Vassilios said he would be in Botswana this week I believe, after being on site in Zambia. Once the money is in the bank he said they would be looking to get the outstanding assays paid for. It wasn’t clear if the assays have already been processed and just waiting payment or if they expect payment upfront. Good to be having potential news flow from two different assets now!

It’s well worth reading the full broker note. Here’s a snippet about the JV:

“ The difference in the terms agreed between ARC and Anglo, and the other deals are stark. We believe this points towards the very high regard in which Anglo holds the ZCP. On the full conclusion of the Anglo JV, the ZCP will have been significantly advanced and we foresee one of three outcomes;

i) a major discovery is made and ARC owns 30% of a project of significant value

ii) ARC has a 30% interest in a significantly derisked copper project too small for the mining majors but of significantly value to a mid-cap or junior miner, or

iii) no significant discovery is made.

History shows that the first outcome would result in a significant value uplift for ARC, the second outcome would also accrete significant value to ARC and its shareholders. We also believe that the third outcome should be viewed positively; having secured significant upfront cash payments that will maintain the business and fund future endeavours, the ZCP would have evaluated and derisked by an expert team at no cost to ARC. ”

Https://x.com/arcminerals/status/1720350730408628710?s=46&t=qK4DPH7pcxWXgzixCRga2w

There’s a lot of interest in that drill core!

F79, Nick did say that Arc can’t re-acquire Kalaba due to the separation agreement but there’s nothing to stop Anglo from acquiring it and bringing it into the JV if they wanted to do that.

I also thought it was interesting that they have a clause in the JV which means any additional license acquired by either party which is within 5km of the JV area, needs to be offered to the JV first. Obviously that would include the application by Anglo for 32582-HQ-LEL but there are two further licenses within that 5km which are ‘pending transfer’ , both owned by Kafue Copper Ltd. I’m not saying they will be included in the JV but it’s a possibility that Anglo have acquired them.

Digger, I don't think they would want to start mining in an area where they are still doing exploration. You might end up dumping the mine waste on top of a potential ore body.

Thinking about the drilling rate, it sounds like up until now they have just been running one shift (12 hours?), Vassilios mentioned that they had drilled 100m in about 7-8 days. They are planning to go to 24 hour drilling so potentially they could reach the target zone a week after going to 24 hour operations.

I must say I'm very keen to see exactly where Anglo have started drilling at Cheyeza East as that might give an indication of what they are thinking. Clearly they already have a target in mind, it was mentioned in the call that they are targeting an area at around 300m depth. They have the new aeromagnetic survey data which we haven't seen and also it sounds like Anglo have done additional geophysical surveying while waiting to get started, AMT and gravity surveys were mentioned in the call.

The idea that Arc could have gone it alone and fully explored our licenses is just not realistic in my view, for many reasons:

First of all, we would already have had to give up half of the Zaco licenses at the last renewal process if it weren't for the JV with Anglo.

Second, raising enough funds to fully explore the licenses in a timely manner would have diluted shareholders massively and also potentially resulted in further license renewals down the road, leading to more relinquishment of license area. Yes it's possible that they might have been able to generate funds from Cheyeza East but I think that was always just viewed as a bargaining chip to say to Anglo that we could generate funds if we really wanted to. The JV was always the primary objective.

Third, Arc simply don't have the technical expertise to successfully explore the licenses in the way that Anglo American do. Most of the drilling that has been done to date has targeted surface anomalies, this has been successful in proving that the licenses have significant mineralisation. This is the worm that has hooked the big fish. You have to realise the scale of the licenses, Arc has barely scratched the surface and to locate an ore body(s) within that area is no small task. You need to bring in the experts and that is exactly what Arc has done.

The share price has risen 33% in the last month, obviously there will be sellers taking advantage of the rise. It has nothing to do with trust in the management.

Kalan doesn’t seem to understand the reason for the rapid rise in share price, which was at least in part triggered by an explosion and shut down at the main Amplats processing plant, triggering a scramble to secure PGM’s at any price. Of course that scenario is not likely to happen again any time soon but the shutdown of some mining operations such as we are already seeing in South Africa could result in another rise. In the meantime PGM and chrome will help support the copper expansion in Zambia which will eventually be the main earnings driver if copper deficit forecasts are to be believed.

Ac123, I think you probably belong in the airtight box along with the rest but please don’t put words in my mouth, I have not made any prediction on share price, nor would I. I’m here because I believe that the drilling will eventually produce the results that genuine investors want. If it takes a month or a year or two years it makes little difference to me.

I think it’s time to put all the trolls and rent-a-ghouls like takenorisk back in the airtight box. They have nothing to contribute thats worth listening to and there will be plenty of news flow here over the coming weeks and months to talk about. They will slowly fade away and find other shares to infest.

Thanks for that Chester, good to see all of your assumptions for the estimate too. I’ve also done a spreadsheet estimate for this year but I’m not going to make it public until the Q1 numbers are out.

A couple of things I would say though:

As the chrome price is almost the same for Q1FY24 as it was for Q4FY23 I am assuming that all of the chrome sold, apart from the new contract, would be at a similar margin to Q4. That’s unless the amount of chrome sold at market rate increased between Q4 and Q1.

If you look at the amount of copper produced during Q4FY23, it was 1514 tonnes, with 1366 tonnes being sold. I would hope we would be somewhere near that again, despite the partial shutdown for the upgrade around mid-September.

It goes to show there’s no honour amongst thieves, jammin86 is calling bushy out as an idiot over on the HUM board last time I looked 😂 They’ll say anything to advance their position.

Mytesco, I don’t know if you’re just trying to troll the trolls or just another FUD account but I’ll be report you along with the rest for disrupting the board.

It’s been a while, so a little reminder of the licenses in Botswana, with a little update at the end, highlighting the two Khoemacau discoveries which have been identified bordering Arc license PL135/2017.

https://seisnav.blogspot.com/2022/07/arc-minerals-in-kalahari-copperbelt.html

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