Member Info for Small_Holding

What Mark Reid desperately needs to do is show where the new customers for gas in Morocco are coming from.
The last one of the eight existing customers was signed up in February/March of 2019.
MR was made interim CEO on 17th May 2019 so he has now had 15 months in charge.

Despite telling investors that there is pent up demand in Morocco and that SDX sell their gas for about two thirds of the price of bottled gas, during MR’s tenure as CEO he has failed to sign even one new gas customer in Morocco.
That is simply not good enough, investors want to see growth.

During the investor call he was asked about this by Shakey and he said it was unlikely they would go down the bottled gas route. He also said they had other ideas, well where are they?
Their gas business in Morocco is very profitable but it could be even more profitable if we saw an expansion of the customer base.

Tigris, I did my own calculations on the profit shift on the ii board, strangely enough I also arrived at an 8% shift of profits to SDX once Sobhi is online, so I don’t think we are that far out.
IPR obviously don’t lose out, they will still get the same revenue from the existing wells, it just means they will receive their money over a longer timescale.

H2 should show the cash on hand rising quickly which will help the share price, I hope.

Just read the FT article, good timing from the world's biggest miner. You are on fire this afternoon
https://www.ft.com/content/82c407a4-4bef-447f-b581-038278b28ff8

Good find, very interesting

OK
My original question was, Will Anglo American win the race for ARC?
Clearly you think they will and if it is a good price then we'll all be happy

Not what I am saying, just your comparison is not comparing equals.

You suggest that the Chinese or Rio could buy Ivanhoe, up the road.

Ivanhoe Mines market cap CAD $6.1 billion or £3.5 billion
ARC market cap £37m

I can see why neither the Chinese or Rio have bid for Ivanhoe but I can also see why they might fancy a punt on ARC

Reading the debate over the last couple of days, posters seem split between some that think a deal with AA has already been done in principle with AA and others who believe that another bigger major will come into the frame after an initial bid from AA.
I am of the opinion that if AA succeed in acquiring ARC then NvS won't get top dollar. It is only natural when horse trading you will offer what you think they will accept, keeping it credible but not giving what you actually think it is worth. When bidding it is human nature to start low and be prepared to increase if required.
For shareholders to get the best return we need another bidder to announce an interest, for that reason I hope the eventually winning bidder will not be AA.
As the world is running out of good new copper assets I think this will get a few interested. Surely the Chinese want it they seem to have a global strategy of buying mines.
Is the general concensus that AA will win the race for ARC?

Thefuturetruth, two points you make that I am fully in agreement with
1. AA will not get the assets without another major being allowed to put in a counter bid
and
2. Extending the exclusivity agreement with AA without an offer makes no sense.

I will be amazed if the exclusivity period comes to an end without an offer from AA being tabled.
NvS also said that the AA approach in his view increases the competitiveness. When AA put in a bid, that is when the game starts.

I will start this post with AIMO

I have been investing in shares for 40 years and picking winners is not easy, on AIM it is extremely difficult.
It isn’t hard to find shares that investors will tell you are on the verge of something massive. I do not offer a “Strong Buy” opinion on this post because I never do, you make your own investment decisions.

However, I do see ARC Minerals as an opportunity that does not come along very often.

They have a very large licence in one of the few remaining interesting relatively unexplored copper postcodes. The previous owner of the licence Anglo American have now come back and entered into an exclusivity agreement with ARC. We know that other majors are looking and have expressed an interest in the licence.
Our previously cautious CEO is now very bullish after the investor call. Not only that but since the investor call they have underlined their positive stance by reproducing positive sections on their twitter feed, to confirm their bullish view.
I believe that change in stance by the management is because they have had approaches from two or three majors. That information gives them the belief that whatever bid AA come in with, there is a reasonable chance that another major might come in with a counter bid.
In any auction if the seller has two or three interested parties, they should get a reasonable final price.
ARC currently has a market cap of around £37m.
Where it not for the global Covid pandemic I would think it could easily be double that now.
If they received an offer on Monday to buy the company for £150m, I am confident the board and/or the shareholders would reject that offer.
Good drilling results in this years drilling campaign will only increase interest and value.
On the negative side if Covid takes a bigger hold in Zambia it may affect the share price short term but not the inherent value longer term.
To summarise, I think this is a very rare opportunity to multi bag your investment in a relatively short timescale. Whilst there are always risks a lot of them have been reduced by AA declaring an interest.
My largest shareholding is now in ARC and I would like to add when funds permit.
DYOR

The point I was making is

ARC have only mentioned Anglo American as well as other anonymous majors
On the BB's we speculate on which other majors may be interested but we are anonymous posters.
John Meyer is a known analyst who works for ARC's Nomad, he could have repeated the party line that other majors are looking but he didn't he names BHP and Rio Tinto, the two biggest miners in the world by market cap I believe.

Don't know if anyone has mentioned this but a couple of days ago John Meyer was on the ********** podcast.

https://audioboom.com/posts/7656269-versarien-and-john-meyer-on-horizonte-minerals-empire-metals-arc-minerals

He starts talking about ARC from 25 minutes in, during the talk he mentions
"but in the meantime I think the company are playing off Anglo v BHP v Rio Tinto potentially"
Why he mentions those two I don't know but SP Angel are the Nominated Advisor & Broker for ARC Minerals

We know that Anglo American have put their head above the parapet and declared an interest. They want a closer look and may or may not make a bid. Another major or majors have expressed an interest in the asset but with the exclusivity agreement ARC rightly cannot talk to them at the moment.

Where Nick and Remy have us at a disadvantage is, they know who the other major or majors are, crucially they know how big they are and if they have deep pockets.

Who is in the best position to assess the prospects for ARC Minerals future?

Nick and Remy are suddenly very positive on the outlook for ARC.

I suppose it just boils down to whether you trust them or not.

For my part Nick was a major factor in my decision to invest in ARC. I liked the fact he had managed at the highest level and he came across as a genuine honest bloke.
LTH’s will be used to expressions from him like “Look, this is very early days” and “We are just scratching the surface”
Now suddenly the language has changed and I am happy to accept his opinion. I am still a little underwater on my investment but finally things look to be taking shape.
AIMO GLA

"I think they are giving us the nod"
Couldn't agree more, it is almost like they are saying " Join the dots"

ARC are still promoting the positive outlook from the investor call. Another quote from Remy added yesterday.
https://twitter.com/ArcMinerals
#ARCM “Clearly there is a lot of upside for us if we do things correctly over the next few months”

Having looked at the boards the general consensus is that Nick has gone from the reserved, cautious CEO to a very bullish one.
The difference in opinion appears to be what has caused this significant change.

To cover the possible reasons I have given a few options;

1. The AA agreement is a done deal and they are just going through the DD.
2. By AA showing interest they have raised the profile of the company and other majors will be looking at ARC.
3. ARC have had approaches from other majors and a bidding war looks likely
4. Muswema hole 5 has finally provided the sulphates needed to put this into the big league.
5. The three holes at Fwiji will be impressive.

There will be other options I am sure (feel free to add) but my gut feeling is probably his optimism is caused by a mix of 3 and 4.

I think it is reasonable to assume that AA will make a bid. Having previously owned the asset, identified targets that ARC’s drilling has now confirmed and entered into an exclusivity agreement, it would be strange if they didn’t make an offer.

The question is will it be a reasonable offer?

If a bid is received and the board consider it fair, it will go to a shareholder vote. These things cannot be done overnight so it will take some time to organise.
From a shareholders point of view that is when we want another major to consider the AA offer too low and make a counter bid.
IF we get a bidding war that is the dream ticket, in that scenario Nick’s prediction that this could be very very big, might yet become a reality.

Having been invested here for a few years I am used to the cautious language NvS normally uses. However, on this investor call that all changed and he could hardly contain his excitement. Using language like "On the slip road of something very very big" "the opportunities are massive" and "we want to make our shareholders as wealthy as we can"
The exclusivity agreement with Anglo American and the approaches from other interested parties may be the only reason for his very bullish tone but I wonder if the first three holes at Fwiji are looking good as well.
We are still awaiting results back from the analysis but NvS will have seen the samples before they were sent off, hopefully not much longer before we find out.

Assuming Anglo American are going to put forward a business transaction, I wouldn't have thought they would wait till the six months expires at the beginning of January. By December with this years drilling finished and the results back I would expect them to be sounding out NvS to get an idea of what it is going to cost them. That way if their initial offer is turned down they would still have time to negotiate before the January 14th deadline.
All in all a very exciting time to be an ARC shareholder.
AIMO

Put yourself in Anglo American’s shoes.
Historically they owned this licence. When they did 9 of their 30 top targets were within this licence. With hindsight they know leaving was a mistake, they want it back, they know Nick as a former colleague. At the end of the six months if they don’t put in an offer ARC can go elsewhere. Whatever bid they potentially put in could be outbid by another major and start a bidding war. Better to put in a reasonable offer and let the shareholders decide. Potentially the six month agreement could be extended but Nick is not stupid, AA have shown their hand now and other majors will want to make an approach, better to go elsewhere if AA don’t make a positive offer. AIMO

On May 28th put out a prsentation showing drilling in Q2 but we haven't heard anything. To clarify I wrote to ARC to ask if they are actually drilling in Zambia now. On the 13th June I received this short reply "Thanks. We will update as soon as we are in a position to. "
Since then nothing, I was expecting an RNS confirming drilling has started but with only 2 working days left in Q2 I am still at a loss as to what is going on.

shakeypremis
Excellent detective work, that now makes a lot more sense.
The 12 well drilling campaign in Morocco seemed excessive with only 8 customers.

I have been scratching my head wondering where the new uptake was coming from and with that in mind I asked MR that during the investor call. He did hint that more news would be released not specifying a region.

I did ask Paul Welch, prior to his departure, what areas of the business gave him the most excitement in terms of expansion, he replied South Disouq and Lalla Mimouna.
At the time I thought OK but you have to sell it, well you may have revealed their intentions, nice one!