Member Info for Small_Holding

In an attempt to establish how many Court cases are outstanding and when they might be resolved I wrote to the company.

Given the news today, this might be the last response from NvS but this is the reply I received.

"There are a number of cases but all revolve around the same issue - interference and breach of the SA. We’re getting close to a number of these being heard / adjudicated on. I’m hopeful that majority will be resolved end Q1 after which we’ll decide on which partner or to drill ourselves. "

All you need is one approach, then if the Zambia licences are as good as everyone says, we would find out exactly who else fancies them.

IF this court case is thrown out on Friday Arc is definitely a takeover target.

Now the JV has gone Arc has now reverted back to the 66% ownership of the licenses they held originally, not just the 20% they did under the terms of the JV.

When Anglo originally agreed to the JV they agreed to pay up to US $88.5m for 70% of the JV.

Anglo thought that was cheap or they wouldn’t have agreed to it.

Pro rata had they bought 100% that would have valued the whole thing at $126m or Arc’s 20% at a notional value of US $25m or £19m

Arc also has the rated Chingola licence and the Botswana licence, which our neighbour wants.

With three saleable assets Arc has a market cap currently around £6.88m.

Once the ownership is confirmed by winning the court case, someone will be eyeing Arc for its break up value.

I have received confirmation from the company that the next hearing date for this case is November 14th 2025.

Avanti agreed to these terms - Settlement Terms

Under the New Settlement Agreement, Avanti and Regency have jointly and severally undertaken to settle the total Outstanding Receivable of US$1,250,000, as follows:

- Through a cash payment, in full settlement of the Outstanding Receivable, of a reduced Settlement Sum of:

o US$562,500 (45%), if paid by 31 August 2025; or

o US$625,000 (50%), if paid by 31 October 2025; or

o US$750,000 (60%), if paid by 31 December 2025.

- If payment hasn't been made by 31 December 2025, the full Outstanding Amount becomes immediately due and payable in full on 1 January 2026; and

- From 1 January 2026, any unpaid amounts will accrue compound interest at a rate of 2% per month, until settled in full.

-------------------------------------------

The August 31st date has passed without payment

The amount they have to pay is increasing at 2.5% a month until October 31st, at which point it increases at 5% a month until December 31st 2025

If they haven't paid by then they owe the full amount (US$ 1,250,000)

Given they signed up to this deal, unless they are desperately short of cash, it is financially a no brainer to pay it as soon as possible.

For that reason I would expect them to settle the balance before 31st October 2025 or at the latest 31st December 2025.

AIMO

You are right, there are no assay results from Botswana outstanding.

Results - Ragnar

I would agree but the Directors have agreed to reduce their salaries by 50% at the moment (at least into the new year) so I think the salaries are now at a more realistic level.

I have now received email confirmation from the company confirming that the new court hearing date is a week tomorrow, September 30th.

The key thing we need to know is when is the court case rescheduled for?

A nationwide judges convention is not organised overnight, they have known about this for weeks.

Surely that days cases have already been rescheduled. As this is not our fault, one would hope it is sooner rather than later.

Given Anglo started drilling late last year and with only one rig and that they have been scuppered this year, the overall spending for the first two years will be very low. Next year is their last chance to either spend a lot of money drilling or just hand over the overspend to Unico Minerals.

Surely better to spend the money trying to get results rather than just hand over the excess cash.

For that reason I would expect Anglo to start drilling early next year and with multiple rigs.

This is great news and will reduce cash burn considerably

"cutting fee payments by up to 50% for board and management, which are expected to remain in place into 2026."

DiamondGeazer, The only thing I disagree with you on is, I think the Arc board are completely in the dark re the slow approach.

If you think about it Anglo have done nothing wrong. They have signed a JV with a minnow, they have and will adhere to the terms of the JV and they will complete the requisite exploration etc as per the terms of the licence.

So I think they will rightly believe it is entirely up to them at what pace they wish to progress and they certainly don't have to answer to a junior like Arc, even if they are a partner. Whatever their reason it will be kept in house because it could be damaging if the real reason came out.

I think the conversation went something along the lines of Arc asking if this years drill plan was ready, to which Anglo said you'll get it when we are ready.

I think the Arc board are surprised at the slow pace and have no doubt come to their own conclusions but I think they are guessing just as much as we are.

I don't think there is much doubt now Anglo are taking it slowly in Zambia. We can only guess at the reason for that. Arc are clearly frustrated at the slow pace but it is out of their hands.

I only hope the Zambian authorities are watching, especially if Anglo have to hand over a large amount of cash at the end of Phase 1 because they haven't spent what they expected to do on exploration.

They may think twice before awarding future licences to Anglo, if they seem lukewarm on Zambia.

It is now over two weeks since I put forward my theory that Anglo aren't particularly keen to find copper at this moment in time.

As far as I can see nobody else has put forward any other theories, with two more drilling weeks wasted, it just strengthens my argument.

With the potential threat of another hostile takeover attempt hanging over them, Anglo want to see their reorganisation completed before going flat out to find copper here.

If that means having to pay extra cash at the end of Phase 1 due to the underspend, then so be it.

Whilst we continue to wait for drilling information, we do at least know the interims should land next Monday.

It will be good to actually know the cash on hand situation and whether we are indeed fully funded into 2026.

As far as I am aware the only thing that has materially changed since that statement was made is, the acquisition of the Chingola licence which had an initial cash payment of USD 50,000.

DiamondGeazer

This is obviously just conjecture on my part but I believe Arc rate Chingola above Botswana.

I think the cancelled proactive presentation was to cover the sale of Botswana to presumably our neighbour. At the last minute the sale hit a snag and the presentation was cancelled.

I think they are now trying to get the sale through, which would release funds to drill Chingola.

If you remember from the latest update “will either commence drilling in Botswana or progress its work programme at Chingola”

It sounded a bit vague at the time but I think that was the reasoning behind it. If we they get the sale through they would prefer to drill Chingola where it has the potential for higher grades.

As I say this is just my thoughts and I could be miles out, time will tell.

This would also explain why Anglo started drilling late last year in August, spent very little and used only one rig (something even the Arc board were surprised at). In my opinion they should be drilling already but we have heard nothing.

Every week that passes without drilling news just strengthens my argument.

I would sincerely love to be proved wrong, so if we get a comprehensive drill plan with multiple rigs at more than one location, I will be absolutely delighted.

However, if Anglo delay the start of drilling, give scant information on their drilling plans and only start with one rig, it will underline my suspicions.

If I am indeed right it is not the fault of the Arc board, it is just unbelievably bad timing to sign a JV with a major who is keen to find copper, only for them to receive a takeover approach soon after.

Like many of you I email the company on a regular basis only to be told things like, this is what happens when you go into partnership with a major, this is what we signed up to etc.

My take on this is, Arc are fully aware of this strategy but there is nothing they can do to alter it, provided Anglo stick to the JV terms which obviously they will do.

Anglo have the luxury of being able to dictate the pace of this exploration campaign and it certainly looks to me like they have decided to take it slowly, let the dust settle from their reorganisation plans and then, when their independence is looking more secure, they ramp up exploration to find the copper they are fairly certain is there.

AIMO

There is no question that Anglo want the JV acreage, they have been after it for years, it has multiple highly prospective targets, they did give a good deal to Arc to get it and they will fulfil the terms of the JV and ensure they get 70% of the JV.

The big question though is,

At this precise moment in time, how keen are Anglo to find copper within the JV licences?

At first glance that may seem like a strange question and you may say, of course they want to find copper.

That may well have been their view at the time of signing the JV but things quickly changed when they received a hostile takeover bid from BHP.

Takeovers invariably happen when a company is undervalued in relation to the assets it holds and this was true of Anglo. Duncan Wanblad, the CEO of Anglo, then laid out his strategy to sell off non core assets and refocus Anglo predominantly on copper.

What he hopes to achieve is, with a slimmed down Anglo focusing on copper, the company will be seen as a better investment by the market. If that is achieved then Anglo’s share price re rates and the market cap of Anglo more accurately reflects the assets they hold. At that point Anglo’s attractiveness as a takeover target is reduced and theoretically BHP leave them alone.

The problem with this strategy is by selling non core assets and focusing on copper, Wanblad is actually making Anglo more attractive to BHP as he sells the items they don’t really want anyway. He is gambling that he can complete his strategy and get the market re rating of Anglo before he receives another takeover attempt from BHP.

Whilst BHP have said they have moved on from the takeover, nobody really believes that and they will be watching what happens.

Now back to the JV, if Anglo find a big copper deposit this year it does not add anything to Anglo’s immediate bottom line. Yes it adds value for the future and the Anglo share price might rise slightly in response, it is unlikely though to rise sufficiently to include the potential underlying value. What it does do is increase the value of the copper assets Anglo hold and in turn, may make a takeover even more attractive as there is more value locked in.

Anglo has been an independent company for over 100 years. Their very survival as an independent company is far more important than when this copper is found. They have control of the licences, they are sure the copper is there and it is in their pipeline of copper for the future.

The JV terms give them the flexibility to drill at their own speed. They have to drill sufficiently to ensure the licence conditions are met but that will be a formality for them. They also have the option of paying cash to Unico Minerals Ltd if the stipulated funds under the JV terms are not spent on exploration during each Phase of the JV. This option of paying the cash difference allows them to really slow down the speed of drilling.

December to April actually

They stopped drilling just before Christmas, so almost 6 months since they last drilled.

In the last couple of days I have found out that there is something in the terms and conditions of the JV that I didn’t fully appreciate. As I follow Arc very closely I think others might not be aware of this as well.

Under the JV agreement Phase 1 looks like this

Phase 1 - Anglo will pay $14.5M in staged cash payments to Unico Minerals Ltd (67% owned by Arc) and invest up to $24m in exploration expenditures (total $38.5M) within three years and 180 days of the signing of the Agreement (RNS 20.04.23) to secure a 51% interest in ZCP.

Now I took that to mean Anglo had committed to spend $24m in exploration expenditures in Phase 1 but that isn’t necessarily the case. I asked the question, If Anglo don’t spend the $24m on exploration in Phase 1 can they pay the balance in cash and still take the 51% in the JV?

Apparently yes they can. They can pay the $24m, or the remaining balance, to Unico Minerals Ltd and trigger the 51% ownership at any time.

This isn’t a problem in terms of money because Unico will receive whatever isn’t spent in cash but it does mean there is not as much pressure on Anglo to rush into exploring the acreage.

I suspect Anglo have worked out before signing the JV deal what they expect to spend during each Phase and, as insurance, they have included the option to pay the balance in cash if they haven’t quite met the target figure.

If you play devil’s advocate and Anglo spend the bare minimum, then at the end of Phase 1 they would pay many millions in cash to Unico when really they haven’t progressed the licence very much at all. It makes better business sense for them to get full value for their money during each Phase, as they are committed to spending the cash anyway.

Once we see this years drill plan we will get an idea of whether the $24m is likely to be spent on exploration in Phase 1 or whether the end of Phase 1 cash payment is going to be significantly higher because it will include any underspend.

Finally, I have absolutely no doubt that Anglo will complete the JV in full. They have wanted this acreage for years, they consider it to have multiple excellent prospective targets, they have given Unico a very good deal to get it and if they don't fulfil their obligations under the JV everything reverts back to Unico.