Member Info for Small_Holding

There is a big difference between being frustrated with your investment and being worried about it.

I am not worried about my investment and I am still confident of a good outcome here. We have a commodity that is going to be in increasing demand, a large licence with multiple targets, majors already interested and a ridiculously low valuation. The current market cap is around £36m and I would be very disappointed if they sold the lot for £200m.
The political situation was a concern but that has now been resolved.

That said, holding this share is extremely frustrating.

The main frustration for me is the lack of communication to shareholders. During the long year of the EA I expected and understood the silence from the company. However once the EA expired we are no longer are under any obligation to anyone. So whilst I expect silence on any deal negotiations, I now expect to be regularly updated on the day to day running of the company. By this I mean in relation to the drilling campaign, the scoping study, revenues received etc.

Bearing in mind the Cheyeza East plant is supposed to be in production in a year’s time and that we were told in Q2 that they “had their foot to the pedal on this”, we are still awaiting any update.

I am also frustrated that the management have now given up on trying to support the share price. They appear to have taken the stance that value will out eventually but bear in mind, thirteen months ago NvS actually said well done to frustrated share holders for hanging on in there (29th July IC) The implication was you have done the hard part, the good times are almost here, at that time the share price was 3.8p

Fast forward thirteen months and we have had nothing in the way of a deal and the share price has fallen 13% in that time to 3.3p. If the management thought shareholders were frustrated then, I wonder how they think we are feeling now.

As I have said before I am not selling until we see a deal here but I do feel for investors who are fed up of waiting and would like to sell but would take heavy losses if they did.

Trickytree if you have held these shares for a few years and you only
"have occasional days of feeling doom and gloom"
I would suggest you are doing very well!
In the meantime keep singing the Arc anthem - Del Amitri - Nothing ever happens

Would NvS and Remy accept £200m for the whole of Arc?

With multiple targets on such a large area, I don't think so.

Even if they did, with 1,335,828,808 shares in issue (fully diluted) that is just shy of 15p a share.
I still think it is more likely to be a partial sale or a JV but it just shows how disconnected the current share price is.

Unfortunately the silence from the company as they continue to talk to potential suitors, makes them a very easy target for investors trying talk the price down by scaring people into selling.
Just my view but I don't think Institutional Investors will invest until they have something concrete in terms of a deal. Yes they will have to pay more for a stake but the risk will have gone.
Currently we are seeing relatively low volumes and it is just nervous Retail Investors selling, the fundamentals still remain the same and I think some will regret selling at these low prices.

I was thinking exactly the same thing, the assay results will take time but the drill cores will give a good indication of what they have found, if anything

I have said before that my holding in Arc is the largest I have ever had in an AIM share. Whilst I said that I had no intention of selling even one share, I also thought that I was holding enough and I wouldn’t buy more.

With the market cap now around £38m I changed my mind this morning adding another £5,000 worth of shares and averaging down in the process.
I’m still as frustrated as everyone else but I’m confident this will come good and see patience rewarded.

You have a very poor opinion of NvS's ability as a CEO

@Major-Tom
So you still think NvS divulged information to a retail investor a week ago, then sat on that information before finally releasing it to the market today?

Arc is pleased to announce the commencement of a diamond drill programme on its majority-controlled licenses in north-western Zambia. Diamond drilling activities are underway at the Fwiji Target Area ('Fwiji') following further technical work and analysis from last year's exploration drilling campaign.



The programme will initially centre on a linear feature ~2km to the south of last year's drilling at Fwiji where a coincident magnetic and soil anomaly has been identified.



This year's programme will also focus on the Cheyeza and Muswema Target areas where the drill target locations are to be finessed upon the completions of a high resolution airborne geophysical survey over these target areas.

@ Major- Tom. Finally we can say we are drilling, hopefully "at a pace"

@Major-Tom
We will agree to differ but with the share price falling steadily I do not believe Arc would have missed the chance to put out positive news to the market.

Every other year we have had an RNS stating 'Drilling has commenced' and I don't see why this year is any different.
We know that the rig was mobilised but until they tell the market that they are drilling, I don't believe we are.

For anyone who has had correspondence from NvS does "Drilling started this week at a pace" sound like language he would use?
I don't think so
As I said yesterday I emailed NvS to ask for confirmation that we were drilling on Monday and I didn't get it. Why wouldn't he send a brief email to say yes we are drilling?
Everything is on hold as far as I am concerned whilst negotiations continue.

We should be drilling now.
If we get a late deal fantastic but if we don't each week of this limbo is a week's drilling lost

On Monday I politely emailed Arc to ask whether they had already started drilling.
I pointed out that, on 25th June Arc tweeted that the contractor had mobilised equipment and included in last Friday's RNS was the statement " In the meantime, we continue with our very exciting drill programme".
As yet I have had no reply and I don’t think I am going to get one now. Today we are almost halfway through July and we don’t appear to be drilling.
The company remains silent on any update, despite the significant fall in the share price.
It is as though they are still negotiating a deal
Has anyone else had a reply to an email they have sent Arc since Friday’s RNS?

At the moment being out of the EA is exactly the same as being in it, silence....

From a purely mercenary point of view I don’t care who buys Arc’s assets, as long as they get the best price.
Anglo’s involvement has raised awareness with other majors, if they weren’t interested already.

NvS has previously mentioned an approach from a Chinese consortium. It is no big secret that China has been buying mines for years and they want to ensure their future metals supply.
This article estimates China’s investment in African mining by 2019 at over $100bn.

https://miningindaba.com/Articles/chinese-investment-in-african-mining-what-you

Assuming the Chinese are still interested, and why wouldn’t they be, I would like to see Arc enter into a dialogue with them.
Perhaps just my opinion but when the Chinese get involved it focuses the minds of the Western companies.
It would also be naive to assume that China’s appetite for strategic metals is not being monitored by the US.

Just my view but I think if Arc want to really raise awareness and increase competitiveness for their assets, then encouraging the Chinese would go a long way to doing that.

NvS knew that the RNS on Friday would have a negative effect on the share price. He also has some positive news about the start of drilling, progress on the scoping study and the airborne survey. Having explained the situation regarding the EA on Friday, I am now expecting some positive RNS's soon and possibly another IC.

We may not have agreed to a deal as yet with Anglo but we have had the benefit of their expertise over the course of the EA and they did pay to have all the soil samples tested. With each successive year the data Arc have collected on the asset is growing, which in turn fine tunes the next drilling campaign. Given Anglo's advice and opinion, this year's drilling should at the very least target the best current areas to find the large deposits. There is a good chance that we hit the large deposits this year, always assuming that it is indeed there to be found.

Just my opinion but having had one long EA, I wouldn't want Arc to go into another one. I prefer the data room option and talk to anyone who is interested.

I would like to hear more from NvS now regarding the splitting of the licenses, was that done purely to suit Anglo or was it something Arc intended to do anyway.

Well I said there would be an RNS this week and there was, shame it wasn’t a mega bucks deal.
Having said that great to see NvS stand up to Anglo and end the EA. I am sure Anglo will have asked for a further extension of the EA, why wouldn’t they. That would have allowed drilling results to come in and confirm what they suspect.

Having had Arc in handcuffs for a year and had their proposals turned down a couple of months ago, Anglo have had plenty of time to come to an agreement.
They haven’t and thankfully Arc are playing hardball.

The share price was always going to get hammered on this news but I think the fall will be short lived. We are awaiting the results of the scoping study and NvS said they had their foot to the peddle on this one. We are still awaiting the drilling commences RNS which should come soon, we have had one every year so this year should not be any different.

We should also start to see more news-flow. NvS didn’t want to upset Anglo during the negotiations but now the EA has ended he can be more open.
Come Monday they can start negotiations with the other majors or Chinese.

This has been debated at length on here and everyone has an opinion. The first RNS was issued 14th July 2020 and was for 6 months. Had that been extended for a further 6 months we would all agree it ends by the 14th July 2021. The extension was notified on the 6th January 2021 for another 180 days, a specific number. As there aren't 360 days in a year, the extended EA ends before the 14th.

My opinion, at this late stage, is that a deal has not been agreed but NvS and Remy are playing hardball through Rothschild. The EA is about to expire and if an agreement can't be reached they will end the EA.

My opinion is that if we get an RNS before the weekend a deal has been agreed or it has in principal and they need to extend the EA again briefly to finalise it.

No RNS this week and they cannot come to an agreement and the EA finishes, meaning Arc can talk to anyone they wish.

If that is the case Arc cannot say we agree to disagree until the EA has expired. The reason for that is even if there is stalemate; Anglo may at the final hour decide to accept Arc's terms.

Come on England!

Stating the obvious I know but a week on Monday is the 12th, in my opinion too late for an announcement, surely we must get an RNS either way next week.

@major-tom
Well that goes along with my assumption that Anglo would want to avoid competition.
Splitting the licenses could suggest a JV or asset sale. If it is an asset sale and all future royalty is surrendered, then as you say the amount involved would indeed need to be very substantial.