Arc shareowner composition to change17 Jul 2019 12:01
One of Nick's immediate ambitions (beyond drill results) is to rid the company of day-traders and move the company increasingly into institutional hands. This can only be done with a market cap >£50m (below that institutional investors rarely have a remit to invest, let alone take any interest). So (a) continued positive drill results should move the mcap beyond £50m (~7p); (b) the Arc team can begin seriously talking to the big boys; and (c) positions can be taken in the open market, or maybe via private placements at a significant premium. And who could help on that front? Why, non other than Remy, our new board member and former resources sector salesman with his Rolodex of connections build from his days at Morgan Stanley and Deutsche Bank - he'll already have been prepping his pals. But the majors might also be want to take a slice (a la SOLG), so the coming months should get quite interesting, so say the least!
Simply put, the traders and weak holders can sell as those with deeper pockets (having understood the fundamentals) buy as the results come in. The mcap moves up...and the IIs move in as meaningful long-term investors.
Arc has such an abundance of high-interest zones, I could see the possibility of it becoming a holding company with its stakes in multiple JVs. Indeed, West Lunga could be the first spin-out, given Nick's comments on the investor call. And with rates so low, debt financing could come into view. Who knows? But there are plenty of options, just how an experienced old hand like Nick wants it.
What's important for any PI who really wants to generate tremendous returns, is to HODL (as crypto fans might say - I'm not one of them, btw). Nick loves optionality, and he has it! Shareholders should be thankful that he came to Arc to execute a clear strategy. He joined because he could see tremendous opportunity, and is moving from the back foot to the front foot. Together with his colleagues, he is in the early stages of engineering what might turn out to be a exercise in colossal value creation, one for the AIM Hall of Fame, perhaps?
It reminds me of the old Peter Sellers film, The Mouse that Roared!
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