Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Graham1981 - two pretty extreme price targets. But even if we use 2p-25p as a range it's the very definition of asymmetric (-25% versus 10 bagger).
Not sure about 6 months - more inclined to go with NvS's expectation of 18-24 months (allowing plenty more drilling and data to show the majors, and in all likelihood against the backdrop of a stronger Cu price).
With what's been proven-up so far, and with the small-scale production of concentrate yielding valuable cash, it's hard to imagine the sp falling below 2p, but you simply never know with AIM! My upside target is 30-50p IF and as and when serious players get involved in taking stake(s) in ARCM, or JV / acquisition of territory etc. But, given 14 prospective zones including a possible cousin to Kamoa-Kakula, that could prove conservative.
Only time will tell, but there are some highly experienced folk running the business (with millions of shares, options & warrants) and they wouldn't be wasting their peak earning years on ARCM (or risking industry ridicule) if they felt that Zamsort / Zaco was unlikely to yield a very substantial Cu resource.
Yes, many thanks Rocktapper, for such a fair and balanced review given available info. Very much reflects the view that (a) the current market cap is essentially underpinned by known resources, so limited downside; and (b) there is considerable upside IF results positive continue to flow from CE and the many other prospective zones (which are not priced-in). Any AIM-listed exploratory mining venture is a gamble but, IMO, ARCM represents an extremely appealing asymmetric risk well worth taking.
Yup, rising Cu price will add extra cash from concentrate sales. Short-term price of Cu at whim of traders / US-China trade talks (i.e. noise), but longer-term (and for decades to come) looking very good indeed for those owning significant resources.
Plenty of drill results to arrive shortly, from multiple prospect zones. Quite possibly further news prior to Monday's AGM, ideally data that provides evidence of a substantially larger system. Grade and accessibility are key, but in this part of the world, it's mostly about volume.
Graham1981 - that was my initial take. I was quite surprised it wasn't highlighted. But I think NvS alluded to it in as it relates to the Q1 report on Cheyeza East economics. He said that - in essence - the value of CE was broadly equivalent to the current market cap (~£20m). That would be achieved by trucking material from CE to Kalaba for Cu concentrate production. It's likely that a modest multiple applied to the revenue generated would result in such a market cap.
And he then said that all the rest of Arc's territory was essentially a free option at today's sp. Whatever the exit or JV route, he's very clearly not interested for selling on the cheap.
Potential revenue for 2020 was mentioned in yesterday's interviews by John Meyer of SP Angel and NvS. Meyer reckons $10-18m which tallies with NvS expecting a few thousand tonnes of contained copper. On the low end, with continued weak copper prices, that equates to about £8m. Such a sum would allow for the drill bits to turn in the Spring, with news in coming weeks and months on the as yet unreported drilling. Not too shabby for a company with current MCap of £19m which has only scratched the surface of its multiple anomaly zones. And it only takes one cracker and / or entry of a major for Arc to multi-bag from here. Keep the faith...
The plan, as I recall, was to scoop up ore from Kalaba as well as using some previously stockpiled material. The grade at Kalaba is lower than Cheyeza East which implies less revenue per processing day.
So, although processing Kalaba ore does result in helpful cash, trucking-in ore from Cheyeza East should mean higher income. But the other reason to explore the processing of Cheyeza East ore is simply to let all interested parties know that - in principle, and possibly in practice - Arc has the means to generate income to continue drilling without having to accept any low-ball offers (for copper regions or for the gold assets).
Sure, some more shares may well be issued, but this is exploration and if Arc can get close to being self-sustaining it's a huge plus. And not only does it allow the drilling and G&A bills to be paid (much assisted by the equity-for-drilling program) but it buys the valuable time to conclude the gold asset sales at a good price (rather than negotiating while being 'over a barrel').
And when the day finally comes and the CASA sale proceeds is in the bank Arc will be very well funded for a substantially increased drilling campaign...and the sp should respond favourably (understatement).
Nice to see copper move back above $6,000 per tonne. Dragged down by trade spats, but medium / long-term price heading to $8,000 and above as supply-demand mismatch becomes ever more apparent.
Arc generating cash for drilling campaigns / lessens likelihood of significant dilution or need to accept low-ball offers / plenty of assays to come from multiple initial targets / many more highly prospective targets for 2020 and beyond / majors analysing the data / gold asset sales in prospect / no debt / market cap ~£22m. From tiny acorns...
It's a maiden shipment, the ball is rolling and cash is being generated for drilling. Examining possible production from high grade Cheyeza East sends a simple message to the market, and the suitors: we can fund ourselves. A seemingly small, but very significant step in the right direction.
Yes, well the article does reflect the most basic investment rule: buy low, sell high. Build a position in unloved assets and reap the rewards when everyone’s clamouring to gain exposure. Arc has been driven way down by short-term traders and has, IMO, tremendous upside as and when we have greater clarity regarding drills / asset sales. Tick tock, surely not long now until further news...
From Mining Journal
Bank says China Inc has copper timing right
Counter-cyclical investing in copper by China Inc is a case of “brilliant timing”, says a New York investment bank, with First Quantum Minerals unlikely to be the last ‘Western’ company targeted by acquisitive Chinese companies in the near future. “First Quantum is highly leveraged to the copper price and is well positioned to benefit from the next cyclical upturn – as long as the Chinese do not beat them to the punch,” the bank said.
Jiangxi Copper, which has been in talks with First Quantum about its Zambia copper assets, is a key stakeholder in new major First Quantum shareholder Pangaea Investment Management. PIM has 10.8% of First Quantum and an option to go to more than 16%.
Investment bank Jefferies says while most equity investors have been unwilling to buy copper-miner shares because of cyclical risk and big diversified miners have also been reluctant to entertain copper M&A due to "a high level of risk aversion and a focus on austerity and capital returns", Chinese groups were doing Copper > Research Comments Share
Staff Reporter
Jiangxi Copper, which has been in talks with First Quantum about its Zambia copper assets, is a key stakeholder in new major First Quantum shareholder Pangaea Investment Management. PIM has 10.8% of First Quantum and an option to go to more than 16%.
Investment bank Jefferies says while most equity investors have been unwilling to buy copper-miner shares because of cyclical risk and big diversified miners have also been reluctant to entertain copper M&A due to "a high level of risk aversion and a focus on austerity and capital returns", Chinese groups were doing deals in the space.
"The timing is brilliant, in our view," Jefferies said.
"We do not believe Chinese state-backed companies are concerned about near term cyclical risk. Their focus is more likely on the strategic benefit of controlling large-scale copper resources for decades via acquisitions at low prices during a weak point in the cycle.
"Based on its accumulated equity interest in First Quantum, PIM/Jiangxi may be interested in making a move on all of First Quantum, which would include Cobre Panama as well as the Taca Taca project in Argentina and the Haquira project in Peru. While we do not believe a full takeover is likely, time will tell what the end game is, and FM shares should rerate as what had been a perceived disproportionate downside risk due to balance sheet concerns is now a disproportionate upside risk due to M&A potential."
I'd say it's just a matter of fact, that from time to time shares will be paid to the drillers. As the share price fluctuates, so will the price at which the shares are issued. It is a form of relatively mild dilution, but helps protect the cash balance and allows Arc to 'crack on' with the drilling campaign.
What would be worrying would be news that the drillers wanted just cash, not shares. They are - IMO - doing precisely what anyone with a sound fundamental knowledge of the prospects would do - grabbing as many shares as possible while the price is depressed. It seems perfectly fair and reasonable to all concerned.
Finally - agree on the 3p - should be a precise number, not an approximation. We all know the share price is currently sub-3p, so no great surprise / issue.
A final top-up at 2.62p - I've said 'final top-up' more than once, but surely the sp direction of travel must change soon! As far as I'm aware the copper, cobalt and gold hasn't dug itself up and run off during the quiet news period, and buying shares in Arc at equivalent £19m market cap is, IMHO, a steal. But I'd still like a nerve-calming change in sentiment...
Absolutely, westie50, none of us know when transformative news drops. Lots of drilling results to come, many of which will land after the rains set in. And, if sufficient work has been completed, a maiden JORC for Cheyeza East should arrive in first few months of 2020.
Finally, the potential of one or two gold asset sales, which could come anytime, who knows? But it's an interesting conundrum: with the gold price seemingly in early stages of multi-year bull market, NvS is right to wait for the right deal. A delay implies additional share issuance / dilution but, with good drilling results, fund-raising should occur at a much more realistic market cap.
So although the rains will set in, the news flow should sporadically continue and have the potential to lift our spirits together with the market cap.
True, 0.03%...but this simply triggered an announcement since it pushed Karl-Eric's holding >6%. Since the end of August he's upped his position by just over 1%, from 4.88% to 6.01% or ~8m shares. He must have considerable conviction based on thorough research or perhaps just be a doubling-down idiot. My money is literally on the former.
A recent addition to the website, to be found as a drop-down under 'Investors'. Crisp, clear and looks good to me. Emphasis on Zamsort / Zaco, with gold assets barely mentioned (indeed, seemingly no mention of Sturec, just Casa...and neither by name). Well worth a look, and with no debt and market cap of ~£21m. If only I had some spare cash...
Disagree. The tweet is just a reminder that work is advancing, plus an interesting horticultural observation. Anyone selling because of it will likely be regretting their decision at leisure. My frustration is simply my inability to top-up.