Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
It is all about who has overall control of these two large licences.
The majority on here I think would say a JV is more likely. If that is the case it has to be under a New Company, jointly owned by all three partners.
If Anglo want the lot, then fine let them buy it at a good price.
If they want a JV don’t give them a JV on everything and definitely (spelt correctly, I’m not H’s little brother SH) don’t give them a stake in the parent company.
Do a JV on certain assets or a licence and set up a New Company to do so, that way Arc still has control of the remaining assets.
NvS and Remy have given potential values of Arc ranging from hundreds of millions to billions of dollars. It depends on what they have and when they sell out.
If Anglo don’t have the stomach to buy the lot, then only give them a stake in a few of the assets or one licence. Keep the rest until it is drilled out and then see what it is worth.
I think NvS and Remy are too astute to lose control of the whole company until a good price is obtained. Just my opinion but if a price is offered that is not considered fair I think they may do a JV on only one licence.
NvS has said previously it is advantageous having two licences, held by different companies, because it makes it easier to potentially split them and do a deal on one or the other.
Many have given their estimates of the total value of Arc, my question to you is what price would NvS and Remy take to walk away now?
Only a few hours now before the CC………….
Given we already own the copper, we have such a large acreage with around 14 targets, we have an exclusivity agreement with a major and the copper price has doubled in a year, I find it amazing that Arc has a market cap of only circa £68m and you can still buy these at just over 6p.
This is the year we should see impressive copper results, if they are there.
Initially Arc only tested selected soil samples to cut down on cost.
Anglo have now paid to have all the old soil samples tested.
This brought Muswema back up the pecking order.
They are undertaking an aerial survey to identify the best targets
Anglo's people will have analysed all the data to determine where they believe Arc should drill
and they are drilling at depth for the first time.
If we do indeed have multiple Tier 1 deposits we should see some good results this year.
Well I wanted an Investor Call for clarification and we have got one
https://www.londonstockexchange.com/news-article/ARCM/investor-conference-call/14956647
Just my view on where we are and I’m sure others will disagree.
We seemed to have hit a good point where the share price was rising steadily and investors were waking up to the potential here.
Then out of the blue we get a fund raise almost immediately after saying they were funded for the next two years. Not surprisingly this hit the share price but, as I said at the time, NvS knew the effect this would have on the share price. For reasons we don’t know he thought this was a risk worth taking.
We can all guess what his rationale was, my guess is it was a great deal at a fantastic price, he had to act quickly and did not want to use funds already committed for drilling etc.
Whatever the reasons why NvS did this U turn, I think that is why some investors are now cautious now about believing what he says and I can understand that.
I think that is why the share price continues to hover at these levels.
Does the current low share price bother NvS/Remy? I have to presume that it doesn’t
CEO/EC’s usually say they can do nothing about the share price and normally I would agree. In this instance the U turn has affected confidence and the share price. This is a situation caused by NvS and if it is an issue he should deal with it.
Given that over a month has passed since that RNS and we have not had an Investor Call, suggests to me that they are not overly concerned about the current share price.
Going against that Arc continue to tweet positive comments about the copper price, intended in my view to boost or support the share price, if that is not their intention what is the point?
We were also previously getting regular regurgitated positive quotes on the twitter feed, again I would say with the intention of bolstering the share price.
The purchase of a stake in Alvis, says to me Arc Minerals will continue to exist after the Anglo deal. That supports a JV or a sale of one or other licence to Anglo.
I just can’t see why a company in the throws of a buyout/takeover would be bothered in buying another asset in a different jurisdiction, given they may not exist in a few months time.
I think we all know the wheels are turning and that Arc are working hard towards a deal but it is frustrating, we are getting close to 300 days of EA and still Anglo ponder their options.
One day our RNS will come.............
AIMO
Gallmat - Yes
longfell - As far as I'm aware they didn't say but I would presume that is the gross figure before it is divided up.
Yes it was but they had already completed the Concept Study at that point using $6,500/t.
If you use the actual copper price at the time of the CC, the price of copper has risen 16%.
This was my original calculation but then I saw the CS had been completed using a very conservative figure it makes the increase in potential revenues even more impressive
Just to add Arc's current market cap is circa £71m or just under USD100m
During the CC 15/02/2021 Remy spoke of the financials for the proposed plant at Cheyeza East. He said (9 mins in) that at current prices the plant would generate between USD $45m to $50m of revenue, giving free cash flow of around USD $25m.
The study was completed using a $6,500/t copper price (from the latest presentation)
The copper price closing price yesterday was $9,758/t almost exactly 50% higher
The costs will not have changed significantly in the two months that has elapsed since the CC.
The proposed plant will now generate USD $90m to $100m of revenue, giving free cash flow of USD $50m
That is an extra USD$25m free cash flow a year going forward.
Is the copper price relevant? I think it is
Pardon the pun but the drilling turns the screw on Anglo.
If Arc drill and find a large deposit of copper, the price Anglo will have to pay will shoot up and more potential suitors will be interested.
The drilling is for Arc's benefit but it may also focus Anglo's attention to getting a deal done before good results are announced
The endless waiting is difficult and I can fully understand why some investors are frustrated. Lockdown has not helped, the nine months we have been waiting for a decision seems more like eighteen because we have been locked up for most of it.
The amount of money you having riding on it adds to the stress and I think there are quite a few of us in the one million plus club, shares that is. At least we are more than half way through the extension period and I agree with others that it won’t be extended again, roll on the drilling season!
During the last Conference Call NvS was asked when the extended EA expired. He did not know exactly so he threw the question over to Remy who also did not know. Rightly or wrongly I took this as an indication that the expiry date was not that important to either of them, as they both thought the matter would be resolved by then.
Yes they would hopefully in a new stand alone company. The point I was making is if they don't enter into a JV and want a stake in the company they would have to buy on the open market, which they couldn't do at anything like these prices.
If it is just a JV that Anglo are proposing, what does that mean exactly?
In simplistic terms they want to buy a percentage of one, or both, licenses and they agree to pay a premium to do that.
For arguments sake lets say they wanted to buy a 51% stake in Zamsort and were willing to pay £100m to do so.
With Arc holding two licenses that effectively gives Anglo a 25% stake in Arc, valuing the whole company at circa £400m.
Now if Anglo tried to buy 25% of Arc on the open market, how much would they have to pay?
Fully diluted there are 1.3 billion shares, for Anglo to buy 25% they would need to buy 334 million shares.
I think we all know what would happen to the share price if they tried to do that, they would end up paying way over the current share price.
The point I am trying to make is
Is it a massive risk for Anglo to enter into a JV?
In my opinion it isn't. They would be entering into a partnership to part own assets they have previously owned, when they did own the licenses many of their top targets were within these licenses, their mining expert David Woods believes the copper is there, they couldn't buy a percentage of Arc on the open market at anything like the current share price and crucially a JV can be agreed without a shareholder vote so other suitors will not get a chance to outbid them.
If Anglo were thinking of a full takeover then I can fully understand their caution and why they want to take as much time as possible to make sure everything is right before making a move but if it is a JV they are proposing they will not be spending anything like the amount they would be risking on a full takeover. In addition, most of the funds would be spent on exploration on a site that they stongly believe holds significant copper.
We are over nine months into an exclusivity agreement and I think that by now, given they owned the licenses previously, Anglo should be finalising a deal.
If they don't make an offer by July and ask for an extension, then I hope Arc walk away.
I think the generous six months extension played into Anglo's hand as they have had more time considering their options.
For investors here that have been patiently waiting for a year at the 'exciting crossroads' I think we deserve a definitive decision by then, one way or the other.
After a curry and a visit to the beer garden I'm the same!
It may be an obvious point but with potentially four spin offs this year, you have to hold OO shares to benefit.
So after each spin off the share price may drop briefly but when investors realise there are more to come, including a dual listing on the Nasdaq, the share price of OO will quickly bounce back.
It will be the spun out companies that some will sell once they are allowed to. Some of those may be volatile but CF has cleverly made sure that there will be demand for OO shares for at least the rest of the year.
F29 yes I appreciate the threshold is 3% but ARC only seem to show holdings over 5% on their website.
I didn't explain myself very well but if MM for example holds 4% would he still show on the Arc website?
I don't know but it would be good to know if he still holds and if so how many.
Interesting, has he just fallen below the 5% threshold. Surely he hasn't sold out we haven't had that volume.
If he has fallen below the 5% we should see a TR 1, as I understand it