Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Whilst many think the deep drilling is being done at the insistence of AA and they will wait for results before bidding, I think the opposite.
I believe NvS is turning the screw on AA by doing the scoping study for the proposed plant and starting to deep drill.
If David Woods has said the copper is there, then AA do not want the big deposits found until they are a partner or own the whole thing.
IF Arc find significant copper at depth soon it would cause AA problems, they would have to pay a lot more for the deal and in some ways their involvement would no longer be as crucial, Arc would have no end of potential suitors circling.
I think that AA will want the deal signed before the first drill turns and if I am right we will see a deal tabled in the next few weeks.
https://drillordrop.com/2021/04/09/west-newton-evaluation-begins/
It is all about control and Mushinge allowed Arc to take control of the Zaco licence. Once you have done that there is little you can do if they go down a road you do not like.
Thankfully I am certain NvS knows this, if he gives up control he would never get it back. For that reason I believe he will get us a deal that is financially beneficial, yet still keeps him/Arc in control of things going forward.
He did but he then resigned as a non executive director in November 2020. Why resign when you have a significant stake in the company? No reason was given and it certainly appeared that he was not happy, we may never find out why
Mushinge was onboard and was facilitated Arc’s increase in their holding of the Zaco license. Crucially in December 2019 he sold 5% of Zaco for $37,500 USD giving Arc a controlling interest in the licence.
Something upset him, whether he wanted an outright sale and a JV was being proposed, or vice versa, who knows.
Not listened to that before but as you say Remy's comments are interesting, also at 54 mins and 1hr 6 mins.
An impressive FD who I'm confident will do his utmost to get the best deal for investors.
On the last Investor Call NvS said that they have their foot to the pedal regarding the feasibility study, he also said we are at an exciting crossroads.
On the previous IC he said that we were on the slip road.
I was hoping by now we would have been in the fast lane, possibly attracting a speeding ticket.
Having sat on the slip road for a long time, it appears we are now just waiting for the AA to come to the rescue and get us started.
When we do eventually get motoring I hope we are in a Ferrari not a Reliant Robin!
https://www.fool.co.uk/investing/2021/03/29/3-penny-stocks-to-buy-now/
I have been invested here for a few years now and I have kept adding as the story has unfolded. I now have the largest holding, in monetary terms, that I have ever had in an AIM share. NvS was a significant factor in my decision to invest and Remy has now made it a great partnership. I have not sold one share.
However, I do understand LTH's frustration, we have been in an EA for almost 8.5 months now, we were told they were fully funded and now they have raised funds. Funds from the CASA sale should have now been received and we are told nothing.
That adds to uncertainty which isn't good.
As I stated at the outset I am happy with my investment and will wait but I do understand why some are getting impatient.
F79 I tend to agree that, for reasons as yet unknown, NvS had the chance to acquire these licences at a very good price and to do that he had to raise funds quickly. To avoid upsetting the AAL deal he has chosen to go for a placing and I'm sure he expected a backlash. If this proves to be a good deal at a low price I am sure we will all be slapping him on the back.
What does concern me is the lack of news on the CASA payment, the date was specific and I'm sure he would like to update the market that it has been paid but we have heard nothing.
After today they should at least update investors, has the payment been received, has it been delayed or have they reneged on payment.
NvS knew what this placing would do to the share price and, for a relatively small amount, he still went ahead.
That might suggest that a deal has already been agreed in principle and he is now looking to the future
pb940. The website is out of date, those figures are from January 2021. Since then they have cancelled 75,837,378 options reducing the total figure
No mention of the CASA $5m which I understood to be spare cash. Raising £1.5m suggests it isn't coming soon.
The more I think about it the more I think AAL will offer a JV.
IF AAL put forward an acceptable JV they will definitely be a part of this project going forward. The licences can then be drilled out and if they are eventually sold AAL will reap their share of the reward.
However, if they attempt to go for a full takeover they run the risk of possibly losing out to another potential bidder. They could be outbid by another suitor and all their work thus far would have been in vain.
Better to get a stake in these assets and reap a reward later, rather than be greedy and go for it all and possibly losing out.
If this is a reasonable assessment then it follows that AAL will have to offer a JV with attractive terms to Arc. If they don’t then they run the risk of Arc walking away and looking elsewhere.
Voisey’s bay has been mentioned a couple of times by NvS as an example of how this could play out.
In March 1995 the Diamond Fields had a share price of $24. Teck bought into Diamond Fields taking 10% for $108m or $36 a share, exactly 150% of the then share price.
https://www.visualcapitalist.com/the-story-of-voiseys-bay-the-auction-part-2-of-3/
Did they pluck a figure out of fresh air? No they didn’t. An offer of a JV was a calculation based on the current share price.
You only have to look at Arc’s twitter feed for the past year; it is nothing but bullish quotes and articles about the copper price. NvS doesn’t do that for nothing, he is trying to boost the share price because it strengthens his hand during negotiations.
If AAL go for a full takeover the current share price is less important but I think you will see if a JV is proposed any deal will have the current share price as on denominator in determining how much AAL have to pay to take a stake.
The one advantage of a full takeover is that it opens it up to other players. With a price per share offer it would be put to a shareholder vote. Whilst that is going through it opens it up to other bids from other majors/Chinese. It is a gamble but NvS may put a reasonable offer to a vote, in the hope that one or more majors makes a counterbid.
With a JV it will most likely have already been agreed when we first hear about it.
The Arc website hasn't been updatede yet so it still shows Fully diluted 1,382,629,286
Following the surrender of these 75,837,378 options, the figure should now be Fully diluted 1,306,791,908
So when the pie is eventually shared out there are fewer slices, which should make each slice or share worth more.
In addition these options were all 'in the money' so yesterday any of these optionjs could have been exercised and realised an immediate profit for thew holder.
Today that is not the case they have in effect delayed their profit.
Both of these things should be seen as positive.
To be fair I have never seen this done before, it shows confidence in a positive outcome because they had guaranteed profit and they are still happy to defer this to another day. I'm sure the market will see this as a positive move.
I presume you think my post just refers to just a full takeover, it doesn't. I think the concensus on here is that it will be a JV and in that case, the amount AAL pay will be related to the current share price. That is why NvS is trying his hardest to boost the share price by tweeting quotes and articles about the copper price.
When the exclusivity agreement was extended by 180 days it seemed like AAL had plenty of time to deliberate over any proposed deal. Now with the drilling season getting ever closer and the share price rising it may focus their minds to getting an offer on the table.
As the share price rises the amount it is going to cost AAL also rises. If the share price were to suddenly spike, and it might, it would be expensive for AAL.
Whilst I appreciate they are a massive company nobody likes to pay more than they have to.
I know there are differing views but I think we won't have to wait a lot longer, especially if the share price continues to strengthen.