Member Info for Small_Holding

@major-tom
In that scenario do you think a shareholder vote would be required?

If Anglo definitely want a share of these assets, and I think they do, then a JV is the only guaranteed way of them achieving that.
A JV will be agreed and announced to the market, the opposition doesn’t get a look in.

However, if they go for a full takeover then the gloves are off and during the shareholder vote process, anyone can put in a counter bid. This is a scenario where Anglo could lose out, even at this late stage.

If you follow my reasoning, then Anglo want a deal agreed before the EA deadline or they want to be certain that they can convince ARC to extend the EA again if an agreement is very close.

If Anglo allows the EA to expire, then they must have decided that Arc’s asking price is too high, they are prepared to walk away and they have wasted all their time and effort thus far.

Arc has licenses covering over 800 square kilometres with about 13 targets. They have found copper and Anglo, a previous owner of the licences, are looking to invest. In addition at least 2 or 3 other majors are waiting in the wings, plus a Chinese interest.
Arc has a commodity that is needed globally as the world switches to electrification and lower emissions.
Arc currently has a market cap of around £55m, which is laughable.

These are valuable assets that someone will willingly buy.
If you hold now, I believe investors will make a handsome profit.
If you are invested here and you want an instant return because you need the funds for other things, then you may lose out.
For investors who have the luxury of being able to wait a while, I don't see a problem.
Yes the share has had a slow puncture for all of Q2 but if you aren't selling it doesn't matter. It has been excruciatingly boring and stressful this last year but it will be worth it.

If this was an internet company valued on tenuous assets I would be worried but we have a valuable asset and value will out.

I have said previously that I think Anglo will want a deal agreed before we start drilling this year.
My reasoning is that Arc could find the big deposit and the whole scenario changes for Anglo.
When they signed the EA they knew by the time it expired, even with the extension, results from the 2021 drilling season would not be known.

That put them in a strong position to try to get a good value deal but time is running out and Arc are now ready to drill.
After silence on the Twitter account since May 5th we suddenly get a picture of the rig possibly on site.
I know that even if they are drilling it is going to be sometime before we get results but I think it is interesting that they are stressing this after a long silence.

After 7 weeks and a day we get an RNS, clearly they are trying to keep quiet whilst negotiations are at an advanced stage.

They had to issue an RNS to say notify the filing extension, so they have tagged on a brief update.
I do not think we would have got that update if they weren't releasing an RNS anyway.
We always get an RNS when drilling commences and that looks like it could be soon.

However, I think the next RNS will be the big one. Either a deal with Anglo, a further extension of the EA or AA do not put forward an acceptable offer and the EA is ended. I think the third option is unlikely.

When I first invested here I was a young man hoping to make a fortune and spend it on booze and wild women.

This has now taken so long that all I want now, at my age, is woman who makes a decent steak pie!

If we make it that far, seven weeks on Thursday without an RNS

The original EA document had the extension clause written into it and we were told this at the time. Anglo decided to take up the option to extend and I think to be fair to Arc you have to let the EA run to completion before criticising anyone.
If Anglo are confident of agreeing a deal, why wouldn't they use all the time available to them to make sure everything is right.
Investors look at it differently and get anxious as the deadline approaches but both sides agreed to this timetable, so they are perfectly within their rights to use all the time allotted. At this stage neither side has done anything wrong.

I don't believe Anglo are waiting for drill results before putting forward a deal. We haven't even started drilling yet and it would take us into August before we see results. Not only that but it would be a massive risk by Anglo because if Arc get excellent drill results they could then go to the highest bidder.
Anglo have already put forward a deal without needing further drill results. Yes it was rejected but it was just an opening offer.

I believe they are putting the final touches to a deal and that is why we are seeing total silence from the company. Not one single tweet since tweet since May 8th.
News wise what is going to happen between now and the deadline that would affect the deal?
The only thing they are going to get are the results from the aerial survey.
Yes we are waiting for confirmation that drilling has started, the outcome of the scoping study and updates on Casa/Sturec but none of that is going to really affect a JV.
I am still hopeful that we will see a deal before the current EA expires.

F29, I think previously they tweeted quotes to try to boost the share price. In reality they had little or no effect so I think they have given up on that one. Hopefully they have too many other things keeping them busy now.
If they have told Anglo what they want, perhaps the current share price is no longer an issue.

If the EA is extended yet again, I would expect an RNS at the end of June, so we probably just have three weeks left before we know either way.

If a deal is getting close, with various parties involved Arc, Anglo, Kopara, Rothschilds etc and we are operating in Africa, surely it would be difficult to keep a lid on it, if a deal had been agreed.
Therefore I would be surprised if an RNS is released without a sudden spike in the share price, prior to the announcement.

Having said that, with the share price slowly falling and the share currently being about as popular as a Richard the Third on the pavement, perhaps we still have a while to wait yet.

Peggy@ I agree it is not ideal and even the rampant bulls probably thought a year ago, we would not be at these levels this close to potentially a deal.
It is what it is and some investors get nervous and sell. It all boils down to whether you believe in the management to get us a good deal, I suspect you do or you would have sold already.
I do think you are a genuine investor who is just frustrated at the length of time this has taken, not just the EA.
To my knowledge you have never been rude to another poster, despit getting a lot of stick on here.
I do hope we see something soon as the clock is ticking

I personally think Arc is not as high risk as some say. They have copper in a good jurisdiction and the landscape for copper has changed dramatically in the last year, in Arc’s favour.
They have signed an EA with a major and all looks good. The EA came with the option for Anglo to extend for a further 180 days in order for them to put forward a deal, if they so wished.
Arc received notification that Anglo wanted to take up the 180 day extension on the 6th January 2021.

During the investor call 6th May 2021, we were told that Anglo had put forward proposals but Arc had knocked them back, explaining to Anglo what Arc wanted from the proposed deal.
Now we do not know the date that Anglo put forward their proposal but to be fair to Anglo, let’s say it was the day before the IC 5th May 2021.
NvS has said that talks had been good so you would hope that a mutually accepted framework had been agreed. The sticking point is probably the price and the percentage under any JV.

You can view the EA in two ways, yes we have a major interested and they are putting together a deal but on the flipside Anglo have now held Arc in handcuffs for almost 11 months. Arc cannot talk to anyone else about a deal on anything relating to their Zambian licences.

By the expiry of the EA, around, 14th July 2021, Anglo will have had a year to scrutinize the data that Arc hold and put forward a deal. Not only that but since the IC they will have had at least two months to put forward amended proposals, having had their first one rejected.

Having said all that my concern is;

That as the EA extension is about to end Arc announce by RNS that they have agreed to a further extension to allow additional discussions, without a deal being formally proposed.
If that were to happen, I fear the worst for the share price.

Personally if Anglo does not come up with an acceptable offer by the end of the extended EA, then both sides should agree to disagree and let’s start talking to other suitors.

Well I can honestly say, this is the longest I have ever sat at an exciting crossroads.

You may well be right but under my scenario shareholders don't lose out as they still would have shares in both entities.
If both or either companies prosper, so do the shareholders, regardless of timescale.

Is it the consensus view that any deal will involve a new company being spun out of Arc?

Some of the amended or split licenses will be transferred into that new company and Anglo will then pay an agreed price per share for a percentage holding in that newco.
After the deal is completed holders of Arc shares will then hold 1 Arc share and 1 share in the newco.

This would allow Arc to still hold the remaining part of the Zaco or Zamsort licenses as well as the new stake in the Kalahari.
If this is the scenario I would expect Arc shares to be initially suspended to allow a shareholder vote on the spin off.

If anyone has lost count, it is now day 316 of the EA!
I know, I should get out more.....

I agree the lack of demand is a concern given the position Arc finds themselves in.
I have come to the conclusion that some investors want to see a deal agreed before investing. Yes they may have to pay more for the shares but by then any perceived risks will be reduced.
The sooner the drilling season starts the better.

SP Angel is our Nominated Advisor and Broker

After the 15th February 2021 Investor Call, SP Angel commented the very next day in a 575 word research note, the gist of which was

ARCM – Call reveals approach by large Chinese player, work on Anglo deal and study on Cheyeza copper mine.
They concluded: Zambia is seeing a resurgence of new interest in copper and cobalt exploration. The nation is significantly easier to work in than the DRC, has good infrastructure for mining and remains relatively unexplored in large areas. If Anglo does not offer a deal to Arc we expect the company may have other offers to turn to.

Two days later John Meyer (SP Angel) is a guest on the vox-markets podcast to promote Arc

We then had the fund raise in March 2021 which John Meyer was not very happy about after Arc had said they were fully funded until the end of 2022 in the recent IC.

It is now 12 days since the latest Investor Call where Remy explained the reasons for the fund raise and even apologised for any confusion around this, since then we have had total silence from SP Angel as far as I can see.

It does seem strange to me that our own Nominated Advisor and Broker does not even comment on the content of the IC, after writing such a lengthy note after the previous one. This may go some way to explaining why there is currently little appetite for the share despite the positive outlook for copper.
(Happy to stand corrected if there is a broker note I haven’t seen. If there is one can anyone give a summary of the comments)