Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
In that scenario what are the Pros and Cons of investing in Arc Minerals
Pros
In partnership with a major miner, Anglo American
30% ownership of a highly rated copper licence
Copper has already been discovered on the licence
A free 7 year carry on the licence
$14.5m staged payments to come from Anglo
No need to raise funds
No need for dilution
Arc could literally just sit back and let Anglo fully explore the licence area.
Potentially massive upside if a large copper deposit is found.
Possible takeover target
Another copper licence held in Botswana
Potential funds still to come from the sale of Sturec and Casa
Cons
No further copper discovered
If institutional investors do not see the attraction of investing in Arc post deal, given the low risk, limited downside and potentially massive upside, I would be amazed.
Once the deal is confirmed I expect to see a high demand from institutional investors who can clearly see the attraction of the risk/reward here.
The new licence area is slightly different
Previous
Zaco 23004-HQ-LEL
38191.986 Hectacre
New application
Anglo Exploration Zambia Limited
38633.9354 Hectacre
The new application is for the same area but it now includes an additional 441.94 Hectacre and now lists Iron Ore as an extra commodity
Just an observation
Whatever your views of the EGM are, Cathal Friel would not get involved unless he saw significant value to unlock in the company's assets, which in itself is an endorsement of RBD's portfolio even if this challenge is doomed to failure.
"Looks like tomorrow it is then"
Peggy I would agree entirely, if the Cadastre gives a clear indication of the licence status tomorrow then we will see how that develops
Whether you think this is a good or bad investment we shouldn’t have long now to wait to find out which camp is right.
If you believe the negative posters that Arc will not get their licenses renewed and the Anglo deal will not happen then stay clear.
If however you believe as I do that a deal has already been agreed in principle and all we are waiting for is the Cadastre to reopen tomorrow, then the question is will Institutional Investors want to buy in post deal.
As a junior miner listed on AIM, drilling in Zambia and with relatively limited resources, it is understandable that II’s would stay clear as it is viewed as a high risk investment.
If Arc’s licenses are renewed and Anglo proceed with the deal then all that changes. We would then have an AIM listed junior miner in partnership with a major miner. Not only that but crucially Arc have a free 7 year carry where Anglo will pay all drilling costs. From a risk/reward standpoint Arc suddenly becomes relatively low risk, especially when you take into account that they have already found commercial copper at Cheyeza East.
With 7 years free drilling this is a low risk investment that could produce amazing returns if Anglo find the mother load which they clearly believe is there.
Again, just my view, but I believe there will be II’s who like the new risk/reward ratio on Arc post deal and who will be very keen to take a stake especially at this low entry point.
GLA
If we are right that a deal will follow shortly, then we will see drilling this year.
We knew that ARC had cash and did not need to raise funds. Still good to have that confirmed by the accounts that show that as of 30th June Arc had £2.35m in cash. Since then they have also received the second instalment of $125,000 from the CASA sale.
Another tweet by our largest shareholder
KEvB
@Trisseswe
22h
#ARCM
This Anglo deal denominated in USD is getting better by the day…??????
I am of the opinion that if this Cadastre review had not taken place then the Anglo deal would have already completed. I expect, once the Cadastre reopens, things will move quite quickly.
As well as conducting a review of all licences I am sure the Ministry will have also been looking at any licences that were up for renewal, or have come up for renewal during the closed period. That way when they do reopen we will see an immediate decision on any renewals, so that the Cadastre is up to date on the day of reopening.
In my view this is the last thing Anglo are waiting for and the deal will be confirmed shortly after.
Given the amount of time the Cadastre has already been closed, I would hope that we don’t have much longer to wait until the review is completed.
Conclusion:
Anglo appears to be gearing up for something in Zambia. This role is most likely to involve work on Arc Mineral’s licenses but could also involve other areas of exploration. Either way Anglo appears to be moving back into Zambia after pulling out in the late 90’s.
Our largest shareholder tweets
https://twitter.com/Trisseswe/status/1567498392493854720/photo/1
https://twitter.com/Trisseswe/status/1567498392493854720/photo/2
It is clear that we won’t get the two licenses renewed until the Cadastre is reopened and when that will be is anyone’s guess at the moment.
As you would expect the renewal applications have already been submitted by Arc to the authorities, I have had this confirmed by the company.
I fully expect that the status of the two licenses on the Cadastre website will not change after the 26th and they will still be shown as ‘Active’ and ‘Pending Renewal’
This is not an ideal situation but it is what it is. Everyone holding a licence is in the same boat, it is just unfortunate that two of Arc’s licenses are up for renewal at this time.
RNS 7 February 2020
The Resource Upgrade Royalty
If, at any time in the period between 19 November 2021 and 19 November 2024, the Šturec JORC Indicated and Measured Resource exceeds 1.5 million ounces gold at a grade greater than 2.5g/t (inclusive of recoverable Ag equivalent), MTC will pay Arc a further A$2 royalty per additional ounce of gold . This royalty is capped at 7 million ounces of gold.
You may have thought that a deal would be announced within the 90 days but most LTH's knew that we needed the licenses renewed first. As I think the first 90 days are up tomorrow, I certainly knew that we were into the second 90 days.
Yesterday morning we knew that we were into the second 90 days, that the Cadastre closing had caused a delay and that the licence renewals were the sticking point preventing the deal being announced.
Arc issue an RNS to announce the maiden drilling programme at Botswana is underway, now does NvS give an update on the AA deal or not mention it because it is still covered by the original deal.
He chooses to give a brief update which confirms what investors already knew, get the licenses renewed and the deal is ready.
It seems, damned if he does and damned if he doesn't.
I still say, get the two licenses renewed by the Cadastre and a deal will follow very soon afterwards.
With the two licenses expiring on the 26th August (a week on Friday), I think it is reasonable to assume that the company should hear this week.
Nothing is happening until the two large Zaco licenses are renewed and they expire 26th August 2002.
In normal circumstances you would expect the licenses to be renewed say a week before that date.
As Seisnav says one of the licences (23005-HQ-LEL) has had its status changed from Active to Pending Renewal, that suggests that the documents have been submitted and are being processed.
The second licence (23004-HQ-LEL) is still shown as Active.
It is my belief that the deal is already done now but the last piece of the jigsaw, before the signing and announcement, are these two renewals.
Get these agreed before August 26th and the deal could be announced almost immediately.
I would also hope that if a deal is just sat waiting to be signed AA are preparing everything for drilling as soon as possible after that date.
AIMO
https://wcsecure.weblink.com.au/pdf/MTC/02547870.pdf
Diamond drilling continues at the Sturec Gold Mine from drill chamber #4, part of the Phase IV diamond drilling campaign
Resource upgrade anticipated following completion of the Phase IV diamond drilling campaign
We do know that two of the Zaco licenses expire on the 26th August 2022.
23004-HQ-LEL
Zaco Investments Ltd
Granted 27/08/2018
Expires 26/08/2022
Area 38191 Hectare
23005-HQ-LEL
Zaco Investments Ltd
Granted 27/08/2018
Expires 26/08/2022
Area 8275 Hectare
Two things need to happen before the JV is completed.
1. These two licenses need renewing, it should be a formality but it has to be done.
2. All the Zambian licenses need transferring into the new ‘vehicle' that has already been mentioned, when the JV is completed.
The Mining Authorities website and the forms needed mention 90 days. I am presuming that Arc will have already submitted, or they are about to submit, the renewal forms.
As no deal has been formally agreed the two licenses will be renewed in the same name of Zaco Investments Ltd.
If the dates don't change then they will run from the 26th Aug 2022 and the deal will be announced after that date, the subsequent transfer forms will be submitted after that date to change to the jointly owned new 'vehicle'
With the licence renewal pending will Anglo agree a deal prior to then?
I don't think so, they are in no rush and the agreement already signed allows them the flexibility to wait, given the generous timeline.
If all the above is accurate then we won't see a deal until after 26th August 2022.
What could change that is if mining licences can be renewed early. That is the forms have already been submitted, they are approved and the new licence runs from say 31st July 2022.
As far as I can see the renewal licence form has to go in under the existing Zaco name if no deal has been done prior to the forms being submitted because Anglo will want to see confirmation of the renewal and Arc obviously won't transfer ownership until the deal is done.
Just my opinion but with Anglo having the time to wait, I think we will see the licenses renewed and then an announcement that the deal has been finalised.
I am hoping the renewal is authorised early and Arc receive confirmation prior to 26th August 2022.
Even if this is the timeline it still means we could be drilling in September.
With more CASA cash and Tingo shares due at the end of the month and Botswana exploration news to come, all still looks good.
AIMO