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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.

F79 I agree with you.
I'm confident NvS won't want this to drag on any longer than it has to, so as soon as it is possible I expect to see the 'Drilling has commenced' RNS
That would definitely pile the pressure on AAL to table an offer, if they haven't already.

Here is another quote they might want to tweet.
NvS 2mins 30sec

“I think as Remy has said many times and I’ve also reiterated that we are not here to make the majors wealthy we are here to make our shareholders, all of you, as wealthy as we can”

If the EWT is likely to start at the end of this month and it could two months?, is it fair to say that we could get a result by the end of May?
Just trying to get a reasonable estimation of when we may get the EWT results

Nick has said before it is very useful in negotiations that Arc have two standalone licenses owned by different companies. If Anglo do not offer an acceptable amount, just do a JV on one licence and Arc can keep the other.
The 400 page document he mentioned was on the Zamsort licence.

In last year’s drilling campaign Arc did not find the big deposit of copper they are looking for. The more data they have improves their chances of hitting the big deposit.
In this year’s drilling campaign they intend doing more targeted drilling at Muswema and Fwiji.
In just over a month Arc could start drilling again (in 2019 they announced drilling had commenced on April 12th)
With every drill there is the chance that Arc hit a substantial deposit and, if they do, it would change the whole dynamic of the deal negotiations. Arc’s expectations would be greatly increased, interest in the licences from other suitors would increase and Arc may be more likely to hold out for a huge offer.

From Anglo’s point of view if things are progressing well, why would Anglo take the chance of Arc hitting the big one, surely it is in their interest to table an offer before drilling begins.
Some may argue that Anglo aren’t bothered if Arc hit a big deposit, my point is why take the risk if it can be avoided.

I think the chances of Anglo walking away and not offering a deal are miniscule. They will make an offer but the question is will it be acceptable to the BOD.
As regards the timing of the deal, we are now into March and I think we will see a proposed deal later this month.
Nick said the legal DD document for Zamsort alone runs to some 400 pages. A big document but it already exists, so a lot of the work has already been done. Anglo have done this many times before and should have an experienced team working on it. During the CC neither Nick nor Remy knew the exact date the EA expires which also suggests they don't think it will be relevant.
Just my view but I think we are getting close now to an announcement

My take on the Arc Twitter feed.
Nick and Remy would like a higher share price to strengthen their negotiating position with Anglo. They can't talk about the EA or talk to other suitors but they can regurgitate positive statements taken from the CC. There may be a bit of keeping existing investors happy but we have heard it already, I think the main intention is to try to raise their profile and talk the share price up.
Everything looks good here and even the copper price is flying to strengthen their investment case but at the end of the day they can't make people buy the shares.
In my opinion it is almost the dream ticket apart from the current share price, which they would like to be higher.

As I have said many times the current share price will be relevant when a JV calculation is done. They don't just pluck a valuation from thin air, whatever Anglo invest under a JV the calculation will be based on the share price at that time.
The higher the share price is, the more Anglo have to pay or the lower the percentage they receive.

A quote tweeted by Nick
""Many of you asked what will the deal look like obviously I am not going to be drawn into any such detail but suffice to say is that any deal that we do will have to generate significant value from where we sit today"

And where do we sit today? - the current share price/market cap.

The deal could be announced at any time, between now and the EA expiring in July.
We all hope it is sooner rather than later but Anglo don't seem in a particular rush.
Investors seem to think they can make money elsewhere and come back to this at a later date, that is a risky strategy but only time will tell if they are proved to be right.

The share price would be a factor in a JV calculation and it is in the Directors interest to boost the share price.
They can't buy shares but they can exercise warrants that are 'in the money' at any time, as far as I'm aware.
It is a consiuderable amount of warrants and MAY be an indication that a deal is coming soon.
We will see if any one else thinks it is an indication.

Just a thought but if they do intend doing serious drilling this year, possibly under a JV with Anglo, wouldn't they need to order the rigs sometime soon? Last year they started drilling in June but if they leave ordering the rigs until the last minute because of a potential deal, the rigs may already be booked.

You can always tell when a share is entering a good phase because you start to hate the weekends and can't wait for 8:00 am Monday for the market to open......

Anglo has a history of going down the JV route and that is what I was expecting. However, with the booming copper price and the lack of good deposits available, I am now wondering if they may attempt a full takeover.

With a JV if the terms are mutually attractive a deal will be agreed and just announced to the market by RNS. In this scenario no other suitors get a chance to offer better terms.

With a full takeover proposal, the shares would be suspended and a vote called to either agree or refuse Anglo’s offer. Whilst the vote is going through it would be possible for another suitor to make a counter bid and potentially start a bidding war.
In this scenario it is possible that Anglo could lose out to another bidder and all their work over the last seven months would be in vain.

This is Anglo’s dilemma, go for a JV and guarantee their stake in the project going forward or risk attempting a full takeover where they might lose out to another bidder.

Given that Anglo are in possession of a lot of data that other suitors are not privy to, if their offer of a full takeover is at a reasonable price that may deter other potential suitors from bidding as they might not want to take the risk.
AIMO

Do not underestimate the significance of the copper price rise today over $4. I thought it was coming but it surprised me how easily it breached the $4 figure.
It may be just a psychological milestone to some but it is a point where watchers suddenly realise that the copper price boom is actually happening.
Personally I don't think today's rise means news on Monday, I just think it is a huge moment in terms of Arc's valuation/market cap as there will be a lot of media coverage around this and it bodes well for next week.
Buyers have been steady but now we may see a bigger appetite for the shares.
AIMO