Member Info for Small_Holding

Arc and Kopara together own 30% of the JV which is split 67% Arc and 33% Kopara

If the joint venture runs to its conclusion

The % ownership of the joint venture will be

Anglo American 70%

Arc Minerals 20.1%

Kopara Investments 9.9%

Are Anglo investing up to $88.5m for 70% of the licenses because they think that is what it is worth?
No they are confident that the 70% is worth many multiples of that investment or they wouldn't have committed to it.

https://www.thisismoney.co.uk/money/investing/article-12007653/SMALL-CAP-IDEA-Copper-producers-sure-benefit-energy-transition.html
"Still, there’s no getting around the uncomfortable fact that best copper has been put in some pretty difficult jurisdictions.

Could there be massive undiscovered fields of copper porphyries in Nevada and Arizona?

Perhaps, but what’s currently showing most brightly on the radars of the mining industry’s explorers remains in well-established areas like South America and sub-Saharan Africa.

That’s where the high-risk, high-reward action is and where last week Arc Minerals (3.73p) tied up a joint venture with Anglo American in Zambia."

We need II buying to get the share to re rate. II's are naturally cautious before making an investment. So whilst Anglo have signed a binding contract the regulatory approvals have not yet been given.
Once the regulatory approvals are received and the first cash payment is received by Arc, then we should see II interest.
In my opinion, the risk/reward with a major onboard will make Arc a very attractive investment with limited risk.

With so many people involved in this deal at Arc, AA, Rothchild’s etc, it would be very difficult to keep a lid on it if a deal was coming in the next few days.
We would have almost certainly seen a surge in buying and a share price spike if a deal was imminent.

I believe, at this moment in time, we are still waiting on the Cadastre to sign off the licences.

That is not to say it couldn’t happen in the next 48 hours or so but if it doesn’t I think we are heading for our fifth extension.

I would love to be proved wrong though

I suspect there is an element of diplomacy here.
The Cadastre has the power to say yes or no to the licences.
If Arc or AA were to say that we are all done and dusted the deal will be signed once the Cadastre gets their finger out, they run the risk of upsetting the governing body.
Better to say
"The parties are currently closing out remaining due diligence, technical and structure issues which are expected to be concluded in the next few weeks"
That keeps everyone placated without pointing the blame for the delay squarely at the Cadastre's door.
I think that is why the upcoming RNS will not blame the Cadstre outright.

Having been invested here for over four years nobody wants this deal to be done more than I do. However, with no movement on the status of the licence applications it is, in my opinion, inevitable that the exclusivity agreement will be extended yet again.
The slow pace of the Cadastre processing licence renewals/applications is to blame.

I am hoping for two things

1. A much longer extension to ensure the deal is completed before the deadline. (These short extensions just raise hopes only to be dashed again)
2. An assurance that only essential work will be done at Botswana. With the licences taking far longer than anyone thought, it is wise to conserve cash as much as possible.
Nobody invested here wants to see a funds raise and Botswana is a sideshow until the main deal is over the line.

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.