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From RNS dated March 12th 2024
'The Directors anticipate applying approximately £2,000,000 of the Fundraise to the Potential Licence Acquisition Process and the Potential Buyback.'
The board's strategy is to spend a substantial amount of the fund raise on acquiring another exploration licence.
It is my belief that this strategy is wrong and I will explain why.
The board sold off non core assets to concentrate on the main asset, Zambia.
They then unexpectedly raised cash to purchase another licence in Botswana, We were told that they just couldn't say no to this asset at the price and I accepted that.
Due to the delays in progressing Zambia cash was running low. So much so that the board decide to suspend Botswana assay testing to preserve cash. Again to save cash any drilling through our 2023 winter in Botswana did not take place.
We then get the awful fund raise at 1.8p partly to buy out a Swedish institutional investor but also because cash was very low.
Anyway, having gone through this extremely painful process for retail investors we now at least have some cash.
We all hope that Anglo commit to an extensive, long lasting drilling campaign this year and find substantial copper. However, nobody knows how long this will take.
If they find one big copper deposit then, as I have said before, the only real way to buy into the JV is to buy Arc shares.
This is the dream ticket but everything takes an age. I was told the Zambian assays were sent off late December, three months later still no sign of the results.
It is my view that we should let Anglo do the work in Zambia as per the JV and the board should concentrate on Botswana, doing the exploration they had to suspend due to lack of funds.
Spending a very large chunk of cash on a new exploration licence commits Arc to spending additional cash under the terms of the licence, with little chance of a return for many many years (Zambia has shown how long it can take)
I have to ask where is the cash coming from? The annual money from the JV will pay salaries, overheads and maybe fund exploration in Botswana but not much else.
You may ask, why not write to the company outlining my concerns. Well I have done that but I just got the straight bat, basically saying this is the company strategy.
I haven't posted for a long time because the BB has become a slanging match and little else. However, I do think this is the wrong strategy when the hard work is already done in Zambia, conserve cash and wait for drilling results but at the same time progress Botswana,
I hope the next RNS is going to either give us the 2024 Zambia or Botswana drilling plan or the Zambia assay results.
Unfortunately I think it may actually be we have spent a large proportion of our cash on another exploration licence that you may see a return on sometime in the next decade.
AIMO
Https://www.share-talk.com/sharetalk-new-year-digest-20-stocks-to-watch-in-q1-2024/
Fulmar
I agree that there is no way AAL will sell their share. What I'm saying is they may not get Arc's 20% if a higher bidder appears
Long term investors here believe the copper is there and the JV will find it, when that happens sentiment will change very rapidly.
At that point anyone wanting to invest in the JV only has one realistic option and that is to buy shares in Arc.
Kopara are a privately owned company and are therefore not listed. Buying shares in Anglo would give exposure to the JV but any effect would be watered down because of the sheer size of the business. To gain maximum benefit from the JV either in terms of a share price rise or to attempt to secure a supply of future copper, any potential investors would need to buy Arc shares.
I know many on here think it is a given that eventually Anglo buy Arc and Kopara out but I believe the Arc board will sell to the highest bidder, as simple as that.
If the JV is very successful what better way to secure future copper supply than to attempt a takeover of Arc. With proven copper, when a bid from Anglo comes I am sure they won't be the only company interested. As I have said previously it is good business sense from Anglo's point of view to make a bid sooner rather than later, before the true value of the JV is realised.
I also find it interesting that they started drilling Cheyeza first. It could be just that the infrastructure is good because of previous drilling but it is my view that they believe Cheyeza could be a Tier 1 and now we know David Wood has been on site that reinforces my view.
We are waiting on four bits of news in the short term
1. Botswana assay results
2. Botswana drilling plan
3. Zambia assay results
4. Granting of the mining licences
Just my opinion but I expect them to come in that order, mainly because the first two are directly under Arc's control.
AIMO
This was a private event aimed at institutional clients, it was not originally intended for retail investors.
Due to the amount of interest from retail investors Arc have made the decision to open it up to a few retail investors to attend as well.
Arc are doing exactly what we want them to do, demonstrate to ii's the attractiveness of the risk/reward investment here.
Many thanks, it makes sense to drill deeper around where they have previosly had success
In the last investor presentation slide 16, it shows 2 significant early discoveries.
Is the one shown for Cheyeza where you believe they are currently drilling?
Fantastic news that the deal is finally unconditional.
As I have said before institutional investors do not want to take any risks, they want as many risks as possible covered before they invest, even if that means a higher entry point.
With the deal now set in concrete the risks have significantly reduced.
The news landing late on a Friday afternoon was not the best time to get a market reaction.
If this deal is as good as it looks, next week we should see either an analyst or a rated share tipster give Arc as a buy.
Given the relatively low risk and the potentially huge reward I would expect that to happen.
I am sure I am not on my own in looking forward to the market opening on Monday
Anglo want to own these licenses outright and it makes good business sense to buy the remaing 30% before the true value of the licences are realised.
The more drilling they complete, the more copper they find, the more the value of the licences increases.
From Anglo's point of view better to take control early on than to wait for the full JV to run it's course.
Just my opinion but once the 25 year licences have been obtained, if Anglo find significant copper, I think we may see a bid made for the remaing share.
Obviously at that point we want to see a higher bid come in from a counter bidder and a bidding war starts.
The deal is not yet unconditional in accordance with the commercial terms previously announced and Arc haven't received any money yet. These two things should be completed in the next two weeks. Lets get those confirmed in the next two weeks and then see what the analysts and tipsters make of the deal.
The key thing that surprised everyone is that we are already drilling and down 100m after the first 10 days, so we will see assay results this winter.
Investing is gambling, you can potentially lose everything.
Yesterday investing in Arc carried risks that the deal did not complete, they ran out of money or that AA can't find copper.
Now Arc can take a back seat and let AA get on with the drilling, the risk/reward has altered dramatically.
The risks are now significantly reduced, there is still the risk that AA don't find any copper but the potential reward is as big as it ever was.
The market will wake up to this
Fantastic news, well done everyone who held their nerve!
I wonder where they are drilling?
Finch
Very true
If this is a pro mining jurisdiction, god help us if we ever try and get a licence in a jurisdiction that drags it's feet!
It would be almost impossible to update the market regarding the delays without openly blaming the inexperienced staff at the cadastre or the Zambian mining authorities, not something you want to do when you are finalising negotiations with a regime you hope to work with for years to come.
Incredibly frustrating I know but better to just get on with it and wait for the Zambian bureaucracy to run its course
Everyone knows who you are and the game you’re playing… except this time we’re all a bit wiser regarding the frauds you perpetuate
The results for the 75th meeting of the Mining Licensing committee are now overdue.
The 74th meeting was held five weeks after the 73rd meeting and on Friday it is seven weeks since the 74th meeting (3rd/4th August)
Not saying ours will be in it but the results should come any day now.
I was previously of the opinion that the approval of the licence would be released at one of the MLC meetings.
However, if they did that the licence would be issued with a wimper when the report of the next meeting is published on the
Ministry website. Having listened to the Minister a couple of times now it is obvious he wants the Zambian people to see
what a great job his party have done in reforming the licensing process and he doesn't waste a chance to tell everyone.
He will want to get the maximum political advantage from this and to do that he will announce the granting of the licence
with a specific news conference or a press release. This will ensure he and the Government get the maximum media coverage of the announcement.
If I am right then the MLC meetings as such are not as critical as I previously thought, the licence could be granted at any time.
We know the Minister has signed the licence transfers, so we must be close.
I expect to see a statement that the Minister is going to release a statement at a certain time in relation to the Anglo/Arc
licence.
The point being I thought if we missed an MLC meeting we were in limbo for another five weeks, I no longer think this is the case
AIMO
What the Minister said yesterday considerably de risks the share in my opinion and that is the main takeaway.
There will only be an RNS when the licence has gone through. Why comment on the Minister's reply and risk upsetting anyone when the process is still ongoing.
72nd Meeting - May 17th to 22nd
73rd Meeting - June 29th to 30th
74th Meeting - August 3rd to 4th
The meetings don't seem to have a rigid timetable but are about every 5 weeks.
That should mean the 75th meeting is either the end of next week or the beginning of w/c September 11th.
Given the number of licences dealt with each meeting I would have thought that the applicants would have advance knowledge that they had already met the criteria. Presumably they have to wait for the actual official confirmation from the Ministry before the news.