Member Info for Small_Holding

NvS
Shares 17,080,532
Options 29,620,195
Warrants 4,555,557

If all options are taken up and warrants exercised he will hold 51,256,284 shares, that should provide an incentive to strike the best deal possible

"The total diamond drilling program for the year is budgeted for an initial 8,000m with hole depths to between 100m - 250m below surface."
Considering we are over 4 months into about a 5 month drilling season, I would hope that they have drilled more than the 10 holes at Fwiji. We know they have now sent a rig to Muswema but do we know how many rigs are currently drilling?

They are supposed to be doing follow up work at Cheyeza East and Muswema according to the original drilling RNS.

The sooner the drilling results are in the sooner we can get this deal done. Once the rainy seasons starts little will change so there is no reason to delay the negotiations once we have all the lab results processed.

It was exactly what I expected because under Covid AGM's are a non event with no shareholders present. Other companies have asked shareholders to submit questions and then after the AGM they publish the questions they like and the answers on their website, this has happened on a couple of other shares I own.
Arc didn't do that so I was expecting another Investor Call but nothing so far. I did email Nick and ask for one but he has not replied.

I would like to know how the lab delays are going, exactly how many holes they have drilled so far and at which targets.
Regarding the lab delays, assuming nothing has changed and they are processing them in order, then we should go back to results every two to three weeks but without clarification we have no idea.

Yezzerrr, from the Annual Report
"Further, since the beginning of this year we have seen a significant increase in interest from major mining companies that are all seeking to replenish their existing copper resource inventories and/or looking for a new prospective exploration ground for world-class copper discoveries. To that end, we have continued to have a number of discussions with major diversified mining groups. These discussions culminated in us signing a 6-month exclusivity agreement with Anglo American in July. This exclusivity agreement will allow Anglo American to have its team on the ground and conduct an extensive technical review over our assets and, depending on the outcome of this review,Anglo American has the right to either extend the agreement and/or enter into a commercial transaction for the development of certain or all of the targets on our licenses."

During the Investor Call Nick was asked if the EA with AAL reduces competitiveness.
He replied that he thought it increases competitiveness, that statement is only true in a takeover scenario.

If AAL attempt a full takeover, they will offer a price, it will go to a shareholder vote to accept or refuse the offer. During that vote process is when we could see another major make a higher offer.

In a partial sale or a JV it can just be announced by RNS as done deal, a shareholder vote is not required so it would not increase competitiveness.

To me that suggests Nick and Remy would prefer a full takeover and that ties in with the sale of non core assets to make Arc more attractive as a takeover proposition.

That is what they were aiming for but that hinges on whether AAL meet Arc’s company valuation. If they do fantastic but if they don’t then a partial sale or JV may be agreed. If nothing AAL proposes is attractive enough Arc could just walk away from the agreement when it expires.

Regarding an extension of the EA, when it was signed it was fully expected that this season’s drilling campaign would be finished and the results known before Christmas. If nothing changes at the lab and very long delays continue, that won’t be the case. We could potentially be waiting up to March 2021 before we get all the results in.
As AAL have the right to extend the EA and they have Arc’s undivided attention, I fully expect them to take the extension. An agreement in principal may already be on the table but why not wait until full results are known before signing it off.

The falling share price is very frustrating especially as each milestone is reached, like confirming Fwiji as a major target.
We haven't had any negative news at all really except the Covid lab delays which were outside the company's control.
Nick was extremely bullish during the Investor Call and I think we now know that his enthusiasm for our prospects was a combination of the Exclusivity Agreement and the initial tests at Fwiji confirming they had found a major deposit.
He has now seen the initial tests from all the 10 holes at Fwiji and in Friday's RNS he confirmed "The initial drilling results at the Fwiji prospect have once again surpassed our expectations with evidence of significant sulphide and oxide mineralisation and more importantly showing continuity across a distance of over 1,000 meters from the first hole drilled"

If the ten holes already drilled have given similar initial test results to the first two, then each subsequent set of lab results for Fwiji should just reinforce the view that it is a Tier 1 target.
The share price has to re rate at some point especially if Fwiji on its own is worth more than our current £34m market cap.

I would love to be proved wrong but I don't think we will see an offer in the short term. With the lab delays and the fact that AAL have a right to extend the Exclusivity Agreement, I expect them to do just that. I would have thought an announcement confirming that in December. The market should view an extension as a positive move as it confirms that AAL will almost certainly put forward a commercial transaction.

From a results point of view the good things is the bulk of the drilling has already been completed, it is just a matter of when we get them back from the lab.
We shall see what NvS says at Junior Indaba, as far as I can see it is still going ahead, unless anyone has heard anything different.
AIMO

If they are all separate entities that isn't a problem. I would prefer the fastest route to monetization personally, I have waited eons before with different companies for promised greater riches down the line that never seem to be transferred into profit.
At my age money sooner rather than later is preferable.

What worries me is AAL getting a stake in Arc for an investment of a few million and that effectively kills off the competition. With such a low market cap an investment of say £30m would get a sizeable chunk of Arc and everything it owns. With 30% of the company they could vote to block any takeover from another suitor.
If a standalone company is formed jointly owned by Arc, AAL and the Mushinge family and the relevent assets are transferred into it, I wouldn't object but I don't like the thought of AAL getting a stake in the parent company for a relatively low investment.
Under your preferred option is that what would happen?

The sale of the non core assets was done partly to raise funds and partly to make Arc a more attractive acquisition target.
Now assuming AAL are not going to mount a full takeover, I think a good outcome would be to sell them one or other of the two licenses. This would be relatively easy to do as they are owned by separate Limited Companies. Not only that but it avoids a joint venture, as Remy said they are explorers not producers. It would give investors an immediate payment in cash by a special dividend or part cash/part AAL shares and some of the money obtained could be used to drill the remaining licence properly before eventually selling.

After the initial excitement around Fwiji I suspected that Zaco would be AAL's preferred licence but now that Muswema has made a re entry into the pecking order perhaps it could be Zamsort.
I know AAL would want the lot but if they aren't prepared to pay Nick and Remy's valuation a compromise could be selling them just one licence. This also avoids the possibility of AAL being given shares in Arc following a cash injection if they are allowed to take a stake in the parent company as part of a JV.

NvS was up for more investor Q&A sessions, now would seem a great time to update investors of drill details, if only the number of holes drilled or lab delays etc

The lack of movement of the share price after this news is frustrating but it is a strange market. Cash is king and it looks like the market wants to see the Anglo deal before re rating the share. Perhaps some think that AA will get it on the cheap, not saying it will happen but it may be a concern to some.

From an investors point of view our investment is even more de risked. The value of the companies assets are worth more today than they were yesterday.
I think this news also almost guarantees that AA will take up their option and extend the exclusivity agreement.
Strange times with the US elections upon us as well but we may see sustained buying from here on in after this news is digested.
Finding out from Nick what the situation is with lab delays would also be useful.

Brilliant news and at around £36m market cap Fwiji is worth multiples of that on its own.
Muswema must look good as well for them to send out another rig straight away following the soil samples.
I hope Nick is going to do a couple of telephone interviews.

Just what was needed, I know it is repeating what has already been said but after all these silent weeks their opinion hasn't changed.

As you say everyone has their own opinion and I accept yours and admire your optimism

They will only get full access to the data when a deal with AA is refused, is that what you are asuming?

Eima
You are right " The other majors aren't daft."
Will they bid a large amount of money on something they are not sure about, no they won't, so a lack of information on what has been found so far is good for AA

What worries me is this silence only benefits one party, Anglo American.
By keeping investors and potential suitors in the dark it just strengthens the AA position.
Just who is in control?
To me at the moment it is AA, especially after they have a RIGHT to extend the Exclusivity Agreement which could mean another 6 months of silence.

Don't hold your breath on the AGM because of Covid restrictions investors can't attend. Some companies ask for questions to be submitted and answer them on their website, cherry picking the easier ones.
Arc aren't even doing that so we will just get an RNS saying all motions passed.

I agree entirely. It is my understanding that if a company has price sensitive information in their possesion then they should release it to the market asap, regardless of any exclusivity agreement.
If that is true then it means there are two scenarios
1. They still haven't received the drill results from the lab
or
2. They have told the lab to hold onto them until they have tested so many results. That way they would probably have an idea of the results thus far but have not officially received them and therefore do not have to update the market.

That is why I will be interested in how many results are released intially, more than three holes and they have been witheld