A New Phase20 Feb 2022 08:50
LTH’s have had a very long wait here to see things unfold, that is all about to change.
Do not underestimate the significance of Friday’s agreement, investors hate uncertainty and the court cases provided that. They also threw in an open ended timescale with nobody really knowing how long the court procedure would last.
With one agreement on Friday most of the uncertainty was swept aside. MM and co must be happy with the agreement or they wouldn’t have all signed it. With the benefit of hindsight I believe the cost to Arc will be seen to be peanuts in comparison to the final sale value of their assets.
Investors watching the Arc story, possibly believing the share price has the potential to multi-bag from here, may have understandably been put off by the court cases. They are no longer an issue here and the only issues MM and co now have are with the Zambian authorities.
We knew that discussions with a major were at an advanced stage, NvS took the opportunity of saying in Friday’s RNS “accelerate our discussions with interested major mining companies.”
The timing of a deal on Friday morning was in limbo, it isn’t now. Once the agreement is rubber stamped by the Zambian Courts, a deal could come at anytime.
One thing delays have done is allow time for checks and to finish the complicated documentation surrounding a potential deal.
I believe we are now moving into a new phase in the Arc story and, for once for Arc shareholders, this will be a positive one. I fully expect to see a greater appetite for Arc shares over the next few days as investors realise the risks have been greatly reduced.
I also believe we will see a deal announced in the next couple of months.
GLA. AIMO.
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