Member Info for sta60

My take, FWIW:

First and foremost, I trust management to maximise shareholder value. The mining business is very tough with equally tough negotiations, especially regarding such a sizeable / valuable / strategically important set of assets. If NvS / Remy decided that a small raise was required, so be it.

I was surprised by the news, given the recent 'no raises' statement, but I trust that it was done for good reason, many of which have been speculated on in recent days. Management have a clear strategy, have engaged world class advisors, and if they need to raise some cash to take advantage of: deeper drilling to satisfy AA demands; buying an interesting asset in Botswana; increasing stake in Zamsort, then fine by me. It will have been well thought through.

I'm intrigued by the possible increase in % ownership of Zamsort. Any drilling costs needs to be paid for by stakeholders on a pro-rata basis, necessitating cash from Kopara, Arc's minority partner. I suspect an elaborate game of chess is being played, best understood only by Arc's management and advisors, not retail investors, and especially those who are vocal about non-delivery of instant gratification. Time will tell, and its a non-linear process, but I'm happy to let them get on with it.

fortunately, we're in a game with stunted-growth snakes and magnificent extendable ladders!

Timely update on my earlier note - (via Bloomberg) Trafigura Group, the world's largest copper trader, expects copper to trade $12-15,000 per tonne in coming decade.

I know the likelihood is for a JV or similar, but I was thinking about what a reasonable price might be for AA to take complete ownership of Zamsort/Zaco.

At Indaba '20 Remy said (in his presentation) that if it takes a further two drilling seasons to prove up 1bn tonnes of ore so be it...that's what they're looking for. Now, if AA took ownership and invested $50-100m for a massive drilling campaign to prove up the entire acreage, all 14 targets, with a view to building a centrally-located processing plant, the question becomes: would they find one or more Tier-1 deposits (including David Wood's 'lost' 25m tonnes)?

So, my back of a fag packet calculation (given such a huge scale drilling campaign that only a major can fund):
~1.5bn tonnes of ore at 0.6% grade with long-term copper price at $10k+ (more than likely given first production unlikely before 2030) yields a total in-ground value close to $100bn, generated throughout a 20 year+ mine life.

This very simplistic calculation could be undervaluing or over-optimistic but, given the incredible demand-supply macro backdrop with electrification and de-carbonisation leading global political decisions, AA (or others) won't want to miss out.

So what price? Several cents on the dollar of in-ground resource? $100bn x 1-2%? A mid-point would yield a bid for the lot at, say, $1.5bn which, for Arc would be $1.5bn / 1.38 (FX) = £1.08 x .7 (approx. ownership) / 1.3bn (shares) = 58p / share

Well, it's a nice thought!

Thanks marco777 - this article sums it all up...it's crystal clear...whatever deal is engineered by our highly experienced management team, the future is tremendously exciting for shareholders.

For me, 25p would be life-changing, 40p truly liberating (19.5p for my wife, 19.5p for me, and 1p for the divorce lawyer).

NB. my wife understands my sense of humour

Agree Small_Holding. Hugely important, especially as an understanding of Arc's extraordinary assets and equally impressive ability to be financially self-sufficient in 2022 (with no outside help or additional dilution) becomes more widely know.

Today, AAL's sp rose 3.8% (and market cap by ~£1.4bn). Teeny-weeny Arc is playing on a very big stage!

and just as importantly, copper just broke $4/lb (up >100% since March 20 low) - huge implications for Arc's scoping study...and cobalt almost $50,000/t !

agree fulmar, not easy to build a position, esp. now given very upbeat CC and institutional validation from HH. But execution traders are (supposedly) experts at the VWAP game (volume weighted average price) and might look to buy 30m shares over, say, 10 business days. 3m shares a day during high volume periods like today could be achievable. In any case, for those of us who have our stakes, build over several somewhat painful years, it's simply terrific to see how the executive team are playing their cards. All the best...

Remy, when he explained that, following Hargeaves Hale, other asset managers had asked about buying-in, only to be politely pointed in the direction of the open market. It'll be an interesting task for buy-side trader(s)...to get to 3% (disclosure level) without excessively moving the market.

Regarding the CC, I'll be perfectly happy with a chipper Nick confirming that constructive discussions with AA continue whilst, in parallel, plans for developing an independent income stream are progressing well, with realistic expectations for producing copper concentrate at very healthy margins (which also helps the financial engineering). And cobalt not looking too shoddy, either. All set against a hugely bullish macro backdrop.

hard to underestimate the importance of Goldman (and JPM) making the 'Supercycle' call. It makes what many here have known for quite a time legitimate and mainstream thinking. The only way to address the supply-demand issue (for years / decades to come) is for the price to increase, allowing previously uneconomic projects to be dusted-off and financed. Few new discoveries and diminishing grades has the majors scouring the world for prospects.

Sentiment has done a 180 and Arc is in the driver's seat with an executive team that knows how to structure a satisfactory deal. I'd be surprised if AA don't become Arc's purchaser, significant shareholder or JV partner, but if what's offered is rejected by NvS / Remy I'm ready with some dry powder to pounce on MMs subsequent kneejerk 'activity'. One way or another 'what lies beneath' will IMO be worth billions (and quite possibly tens of billions) of aggregate value in the decades to come.

I'd love to be a fly on the wall as resource estimates, discounted future cash flows and net present value is discussed. And, until the right deal emerges, Arc can continue its plans to develop its own income stream, with the plant upgrade, no shortage of ore and Cu / Co prices in bull mode. This alone allows our team to negotiate hard and fair without blinking.

Next Tue/Wed is Indaba, and NvS usually likes to drop some positive news beforehand.

Good luck with the top-ups...often, the best buys (in retrospect) make you feel quite sick and trembly when you press 'confirm'!

Arc has a history of making important announcements in the days leading up to Indaba. Despite it being virtual / online, it's the forum at which big announcements have a particularly high impact. Peers / competitors are watching. AA CEO Mark Cutifani is a key speaker. Copper has rarely been more important for majors. Of course, we may still have many weeks of waiting until any Arc / AA deal is announced (and they may fail to come to terms), but what a time to announce to the world that AA have regained a stake in the Copperbelt. Next week could be quite interesting. Or not (!)

Bear with me! In 2012 Pogba was allowed to leave Man Utd in exchange for a pittance (a wad of luncheon vouchers I believe) and headed to Juventus. Four years later he returned to Old Trafford for a record-breaking £89.3m. Same asset, different price. Just saying...

Plenty of us old-timers here, hanging on like crypto HODLers. I arrived in 2011 with high hopes on the basis of Sturec and comforted by Henderson Global Investors' 11% stake just as the gold / mining boom crashed spectacularly.

Kudos to Vassilios for picking-up the initial stake in Zamsort on the cheap (in the depths of a brutal bear market), and to NvS for applying focus. It was the announcement that Arc had a controlling stake in Zamsort that really encouraged me and, like @Trickytree77 I averaged down aggressively from an initial purchase of OTC shares at an equivalent of £1.60 / share (not a typo). And now, with an average of 4.5p, here we are in a markedly different environment with enviable prospects. GLA, new and old holders alike!

daviddune As much as I too believe we have very considerable upside, I should correct you - Arc has 16.5m tonnes of ORE at Cu-equivalent of .92% (it includes Co component). As NvS and Remi have said in the past, the aim is to drill and drill (likely with partner / AAL?) to prove up 1bn tonnes at average grade of 0.6% or (hopefully) more. Those are the numbers that make a multi-billion capex investment worthwhile. Exciting times, nevertheless!

Without much fanfare, it's good to see Cobalt with a spring in its stride. From a low of about $25k per tonne it's back over $35k and looks to be joining other commodities in the early stages of new secular bull market. As I recall, Arc has impressive cobalt numbers in the Kalaba area which became less interesting to the market as cobalt plummeted a couple of years ago.

With copper surging (infrastructure, de-carbonisation / Biden's Green New Deal etc.) we really couldn't have a better backdrop for discussions with partners regarding how best to extract maximum value for Arc's multiple targets.

In the meantime, I'll get back to watching paint dry.

My sympathies, F79. You appear to have inadvertently poked a hornets nest at a time of high anxiety! The MMs have jumped on it to dislodge those with stops.

If Arc is engaged with AA for a 'new' period, this really should be a matter of public announcement. In any case, my sense is that no clarity simply masks a period of intense negotiations. It'll happen when it happens (with AA or another entity), given the essentially direction of copper in the coming decades, in the midst of a new commodities super-cycle driven higher by good old-fashioned 70s-style inflation.