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Arc is pleased to announce the commencement of a diamond drill programme on its majority-controlled licenses in north-western Zambia. Diamond drilling activities are underway at the Fwiji Target Area ('Fwiji') following further technical work and analysis from last year's exploration drilling campaign.
The programme will initially centre on a linear feature ~2km to the south of last year's drilling at Fwiji where a coincident magnetic and soil anomaly has been identified.
This year's programme will also focus on the Cheyeza and Muswema Target areas where the drill target locations are to be finessed upon the completions of a high resolution airborne geophysical survey over these target areas.
@ Major- Tom. Finally we can say we are drilling, hopefully "at a pace"
@Major-Tom
We will agree to differ but with the share price falling steadily I do not believe Arc would have missed the chance to put out positive news to the market.
Every other year we have had an RNS stating 'Drilling has commenced' and I don't see why this year is any different.
We know that the rig was mobilised but until they tell the market that they are drilling, I don't believe we are.
For anyone who has had correspondence from NvS does "Drilling started this week at a pace" sound like language he would use?
I don't think so
As I said yesterday I emailed NvS to ask for confirmation that we were drilling on Monday and I didn't get it. Why wouldn't he send a brief email to say yes we are drilling?
Everything is on hold as far as I am concerned whilst negotiations continue.
We should be drilling now.
If we get a late deal fantastic but if we don't each week of this limbo is a week's drilling lost
On Monday I politely emailed Arc to ask whether they had already started drilling.
I pointed out that, on 25th June Arc tweeted that the contractor had mobilised equipment and included in last Friday's RNS was the statement " In the meantime, we continue with our very exciting drill programme".
As yet I have had no reply and I don’t think I am going to get one now. Today we are almost halfway through July and we don’t appear to be drilling.
The company remains silent on any update, despite the significant fall in the share price.
It is as though they are still negotiating a deal
Has anyone else had a reply to an email they have sent Arc since Friday’s RNS?
At the moment being out of the EA is exactly the same as being in it, silence....
From a purely mercenary point of view I don’t care who buys Arc’s assets, as long as they get the best price.
Anglo’s involvement has raised awareness with other majors, if they weren’t interested already.
NvS has previously mentioned an approach from a Chinese consortium. It is no big secret that China has been buying mines for years and they want to ensure their future metals supply.
This article estimates China’s investment in African mining by 2019 at over $100bn.
https://miningindaba.com/Articles/chinese-investment-in-african-mining-what-you
Assuming the Chinese are still interested, and why wouldn’t they be, I would like to see Arc enter into a dialogue with them.
Perhaps just my opinion but when the Chinese get involved it focuses the minds of the Western companies.
It would also be naive to assume that China’s appetite for strategic metals is not being monitored by the US.
Just my view but I think if Arc want to really raise awareness and increase competitiveness for their assets, then encouraging the Chinese would go a long way to doing that.
NvS knew that the RNS on Friday would have a negative effect on the share price. He also has some positive news about the start of drilling, progress on the scoping study and the airborne survey. Having explained the situation regarding the EA on Friday, I am now expecting some positive RNS's soon and possibly another IC.
We may not have agreed to a deal as yet with Anglo but we have had the benefit of their expertise over the course of the EA and they did pay to have all the soil samples tested. With each successive year the data Arc have collected on the asset is growing, which in turn fine tunes the next drilling campaign. Given Anglo's advice and opinion, this year's drilling should at the very least target the best current areas to find the large deposits. There is a good chance that we hit the large deposits this year, always assuming that it is indeed there to be found.
Just my opinion but having had one long EA, I wouldn't want Arc to go into another one. I prefer the data room option and talk to anyone who is interested.
I would like to hear more from NvS now regarding the splitting of the licenses, was that done purely to suit Anglo or was it something Arc intended to do anyway.
Well I said there would be an RNS this week and there was, shame it wasn’t a mega bucks deal.
Having said that great to see NvS stand up to Anglo and end the EA. I am sure Anglo will have asked for a further extension of the EA, why wouldn’t they. That would have allowed drilling results to come in and confirm what they suspect.
Having had Arc in handcuffs for a year and had their proposals turned down a couple of months ago, Anglo have had plenty of time to come to an agreement.
They haven’t and thankfully Arc are playing hardball.
The share price was always going to get hammered on this news but I think the fall will be short lived. We are awaiting the results of the scoping study and NvS said they had their foot to the peddle on this one. We are still awaiting the drilling commences RNS which should come soon, we have had one every year so this year should not be any different.
We should also start to see more news-flow. NvS didn’t want to upset Anglo during the negotiations but now the EA has ended he can be more open.
Come Monday they can start negotiations with the other majors or Chinese.
This has been debated at length on here and everyone has an opinion. The first RNS was issued 14th July 2020 and was for 6 months. Had that been extended for a further 6 months we would all agree it ends by the 14th July 2021. The extension was notified on the 6th January 2021 for another 180 days, a specific number. As there aren't 360 days in a year, the extended EA ends before the 14th.
My opinion, at this late stage, is that a deal has not been agreed but NvS and Remy are playing hardball through Rothschild. The EA is about to expire and if an agreement can't be reached they will end the EA.
My opinion is that if we get an RNS before the weekend a deal has been agreed or it has in principal and they need to extend the EA again briefly to finalise it.
No RNS this week and they cannot come to an agreement and the EA finishes, meaning Arc can talk to anyone they wish.
If that is the case Arc cannot say we agree to disagree until the EA has expired. The reason for that is even if there is stalemate; Anglo may at the final hour decide to accept Arc's terms.
Come on England!
Stating the obvious I know but a week on Monday is the 12th, in my opinion too late for an announcement, surely we must get an RNS either way next week.
@major-tom
Well that goes along with my assumption that Anglo would want to avoid competition.
Splitting the licenses could suggest a JV or asset sale. If it is an asset sale and all future royalty is surrendered, then as you say the amount involved would indeed need to be very substantial.
@major-tom
In that scenario do you think a shareholder vote would be required?
If Anglo definitely want a share of these assets, and I think they do, then a JV is the only guaranteed way of them achieving that.
A JV will be agreed and announced to the market, the opposition doesn’t get a look in.
However, if they go for a full takeover then the gloves are off and during the shareholder vote process, anyone can put in a counter bid. This is a scenario where Anglo could lose out, even at this late stage.
If you follow my reasoning, then Anglo want a deal agreed before the EA deadline or they want to be certain that they can convince ARC to extend the EA again if an agreement is very close.
If Anglo allows the EA to expire, then they must have decided that Arc’s asking price is too high, they are prepared to walk away and they have wasted all their time and effort thus far.
Arc has licenses covering over 800 square kilometres with about 13 targets. They have found copper and Anglo, a previous owner of the licences, are looking to invest. In addition at least 2 or 3 other majors are waiting in the wings, plus a Chinese interest.
Arc has a commodity that is needed globally as the world switches to electrification and lower emissions.
Arc currently has a market cap of around £55m, which is laughable.
These are valuable assets that someone will willingly buy.
If you hold now, I believe investors will make a handsome profit.
If you are invested here and you want an instant return because you need the funds for other things, then you may lose out.
For investors who have the luxury of being able to wait a while, I don't see a problem.
Yes the share has had a slow puncture for all of Q2 but if you aren't selling it doesn't matter. It has been excruciatingly boring and stressful this last year but it will be worth it.
If this was an internet company valued on tenuous assets I would be worried but we have a valuable asset and value will out.
I have said previously that I think Anglo will want a deal agreed before we start drilling this year.
My reasoning is that Arc could find the big deposit and the whole scenario changes for Anglo.
When they signed the EA they knew by the time it expired, even with the extension, results from the 2021 drilling season would not be known.
That put them in a strong position to try to get a good value deal but time is running out and Arc are now ready to drill.
After silence on the Twitter account since May 5th we suddenly get a picture of the rig possibly on site.
I know that even if they are drilling it is going to be sometime before we get results but I think it is interesting that they are stressing this after a long silence.
After 7 weeks and a day we get an RNS, clearly they are trying to keep quiet whilst negotiations are at an advanced stage.
They had to issue an RNS to say notify the filing extension, so they have tagged on a brief update.
I do not think we would have got that update if they weren't releasing an RNS anyway.
We always get an RNS when drilling commences and that looks like it could be soon.
However, I think the next RNS will be the big one. Either a deal with Anglo, a further extension of the EA or AA do not put forward an acceptable offer and the EA is ended. I think the third option is unlikely.
When I first invested here I was a young man hoping to make a fortune and spend it on booze and wild women.
This has now taken so long that all I want now, at my age, is woman who makes a decent steak pie!
If we make it that far, seven weeks on Thursday without an RNS