Member Info for sta60

In early April 2018 Arc's share price dipped down to ~2.1p, in fact it went sub-2p intraday: I remember it well! Then, shortly after the start of the new tax year, the sp began its healthy rise. Interestingly, this was during a period of relatively little news (no RNS between end of Feb and early May).

May into June brought us news of Arc taking its controlling interest in Zamsort (the absolute company-maker for me) plus the involvement of Don Bailey (a positive indicator) and the CASA JORC of 3moz. So, with strengthened fundamentals and rainbow-chasers arriving like bees to the honey pot, the sp heads up to >5p.

Since then, most of the 'moves' have (I suspect) been preparatory / behind the scenes. With no blockbuster news, rain delays and some necessary dilution, the sp drifts down to the mid-2s. And here we are, just about to enter a new tax year, and at this price the opportunity presents itself to shelter ~750k shares in an ISA.

I'm not Mystic Meg, but I wouldn't be surprised to see a fresh move up in the coming weeks - there's no shortage of news to come. Thanks to the downward drift I've added ~500k shares sub-3p and next week will be giving them the tax protection they deserve!

My life achievement is to have Westie, Fulmar and China on each others’ Christmas card lists, and in so doing be awarded a Nobel Peace prize.

Rather than ramping, I believe many here are simply optimistic given a thorough understanding of fundamentals.

So, the negatives: small scale plant could have problems that are unlikely to be overcome; Sturec may never be sold; DRC might succumb to civil war / meltdown; Ebola might arrive in the CASA geography; POG might collapse; ARC ownership might be questioned; there might be a series of huge disappointments as Zamsort zones continue to be drilled; NvS might fall down a manhole; the world might be hit by an asteroid or have its infrastructure incapacitated by a rogue solar flare. LOTS can go wrong, but on balance, with the info available, some of us feel that £18m market cap is good value, with plenty of POTENTIAL upside.

Hello librayang - happy to - here's my version:

Near-term revenue from modest production of copper and cobalt cake at Kalaba. Not a fortune, but it should be sufficient to pay G&A bills and perhaps some drilling costs. The Kalaba zone is close to receiving a JORC resource number. At a minimum it will supply the small scale plant for an eternity; but it might have sufficient to expand the plant significantly (my guess only).

Selling non-core assets: Sturec has been problematic for years, but any sale price will provide cash for Zamsort drilling and remove it as a management distraction; CASA - DRC 3moz gold JORC in which Arcm holds ~ 71% - it's likely to be sold to Chinese, with very rough estimate of cash to Arcm of $20-30m (3m x discounted $15 per oz in the ground x 71%). Hopefully, these disposals will be concluded by Q3/Q4 2019 with cash then available to drill, drill, drill...

...the many remaining targets sitting within the greater Zamsort area. Two new 'finds' look potentially outstanding, but others are possibly very attractive in their own right.

Arcm should still have £2m+ in the bank for drilling the most prospective new targets (after a recent raise in which management yet again participated). Management have plenty of shares / options and are characterised as 'wily old hands' with great depth of experience and connections.

The share price has drifted down with lack of news, mostly due to rainy season delaying completion of plant and Kalaba JORC.

Current sp equates to ~£18m market cap, which could possibly be supported just by likely cash flow from plant (conjecture on my part), but will likely behave perkily as and when the non-core assets are sold. Asset sales + revenue should reduce likelihood of diluting share issuance. If new drilling confirms v substantial new zones then the market cap should see a tremendous uplift.

I could go on...but hope that helps (in conjunction with info from Arc website)

Needless to say, good luck to all

While Nero fiddles, sta60 takes the opportunity for a modest top-up...couldn't resist at 2.5375p. I could be deluded, but while things are quiet, this is the time to add. As for Cu and Co prices, don't worry about short-term, focus on medium- to long-term macro drivers: that's where there is serious money to be made.

thanks allthatglitters, interesting insight
selling at 2.52 might be the resources equivalent of Decca not signing The Beatles!

Yup, it's hard to believe that the sp can go meaningfully lower...but I've thought that (based on fundamentals) plenty of times! So, MT1, your timing looks promising.

As for today's larger trades: 2 x 275,354 = 550,708, so looks like a Bed & ISA pre-new tax year. I have to wait for April 8 for next allowance, so wouldn't be overly upset if sp remains under 3p for another couple of weeks.

...is virtually guaranteed. Why? Because I want to move as many shares as possible into my ISA in the new tax year. At <3p I'd be well chuffed, hence - employing the rule of sod's law - the price will rise significantly before then. A message to Arc Minerals - I'd welcome a further delay in meaningful news. As for the medium- and long-term, I sleep easily.

Original drilling aim was 10-20m tonnes. In an interview post initial drilling NvS cautiously mentioned that 50-60m was looking possible. Very little news since then. Post-INDABA article:

https://www.themastonline.com/2019/02/08/zamsort-steals-limelight-at-mining-indaba

Maybe a JORC of 100m+ with (possibly Zambia) financing takes us to the article's stated $100m needed to produce 60k tonnes of Cu/Co equiv pa by 2021. Despite Kalaba being recently 'relegated' it's not to be underestimated, especially if copper is trading closer to $8k per tonne by then...indeed, the 'market' seems pretty positive on copper for the next 20-30 years, so Zamsort is no 'flash in the pan'!

Pleased to see your arrival, having read your sage OTC / ARCM musings on a rival board. Do I recall you bought into Ortac (like me) as exposure to gold exploration? Entered OTC in 2011 (not good), and since averaged down to the mid-4s (flying in the face of sensible concepts like diversification), but despite now holding >5m, for some time now I've felt pretty comfortable. Seems to me NvS is the right man to have in charge. Copper in particular looks to have a tremendous few decades ahead, Zamsort looks extremely promising and, as a result, I too am happy to hold for an eventual - hopefully rewarding - outcome.

Bloodshot
Thanks - very sticky, having averaged down to ~4.5p, and strangely sanguine, especially when looking at the market cap vs assets / prospects. For me, the long-term macro drivers are hugely important and it's simply a question of trust in management to prove that Zamsort is home to a great deal of copper etc. Always a question of 'if', but I'm comfortable with the plan and am happy to wait another year or two...in my boat which may one day have an outboard motor!
Cheers

China - for what it's worth the sp didn't 'start' a year ago, that's just when you started investing...and well done you, for entering in the mid-2s. Spare a thought for folk like me who entered at an equivalent £1.60 (Ortac in 2011). AIM is often a rough ride, but you should take comfort from the proven resources (which underpin today's market cap) and, if sold at a reasonable price, will provide time and cash to examine what appear to be very exciting acreage. Mining in far away places is a tough business and not everything goes to plan. As for dilution: it happens, but with cash in the bank and income from CSD there should be less dilution in prospect. At least you didn't invest in a predictable consumer behemoth like Kraft - this is much more exciting! All the best

Agreed caseyjones - accepting some dilution now could turn out very well in the longer term. No pressure to do deals on poor terms and not long until the small scale production creates an income stream.

The raise plus revenue provides NvS with the balance of 2019 to sell Sturec & CASA and fill the coffers to turbo-charge drilling at Cheyeza West and Lumbeta (and Fwiji sufficient to sell or jv, as NvS alluded to on the call).

If Arc can establish that one (or two) zones are broadly similar to FQM's Sentinel we can look forward to an exciting 12-18 months ahead. The prize is a JORC resource with potential to produce 150-300k tonnes pa of copper in several years time, about the time copper is expected to be $8-10,000 per tonne. And on that note, good to see copper a whisker away from $6,500 today.

I'm sure good things will come to those who are patient, but negotiations with third parties will be much helped by macro backdrop, including strengthening gold price and copper having a good run. Transformational deals don't happen overnight, and despite 'interesting' timing of today's announced raise there's cash avail to drill, drill, drill and strengthen our hand in talks.

Sturec exclusivity agreement featured in Nov '18 presentation, but I was heartened by NvS comments in most recent interview...the three interested parties. If a sale occurs which (a) strengthens the balance sheet and (b) eliminates a nagging management distraction then it'll be a very good news day!

now on website. Page 9 is most notable since it shows Arc's re-ranked target list, eleven of them PLUS Kalaba. No shortage to divide up, prove up, sell stakes, prove up, sell etc. etc.

Strider - yup, SOLG have verified Tier 1, but a market cap about 32x Arc's. Hence Arc's (potential) upside as and when, and if, large resources are proven. Arc mcap, btw, more than underpinned by CASA value, even at an appropriate DRC discount. And, although I'd agree with you that your average squid is indeed damp, you'll find the actual phrase is damp squib (firework-related).

Strider - freely admit I am no expert! 'Two tier-1 assets' quoted in Arc's presentations, most recently Nov '18, on company site.

(1) CASA has JORC 3moz, with clear potential to increase
(2) Zamsort looks highly promising, but I'll concede that, until absolutely proven, Zamsort's multiple-zone resources remain 'prospective'. However, once proven, Arc's market cap would be considerably more than £20m (with no debt and CASA to sell).

Bottom line: given Arc's portfolio and improving sentiment, the current company valuation seems good value. Never any guarantees, of course!

Strider - I can empathise, having bought into OTC in 2011 on a soaring gold price and an interesting Slovakia resource; also, at that time, Henderson Global Investors held 11%. Worth a punt, I thought. Wrong. But OTC management did use some spare cash to buy minority stakes in Casa & Zamsort in the depths of a huge commodity bear market - unloved, dirt cheap.

NvS arrived in Jan '17 (initially as NED) with a record of achievement plus a well-publicised dust-up re: Bumi. OTC was a shareholder destruction disaster, but NvS's arrival brought about much-needed execution skills and an opportunity to build a meaningful company. Know-how, relationships, energy, focus, the ability to politely knock heads together etc. With two Tier-1 assets, the new management team are moving onto the front foot. So, rather than sell at a big loss I doubled-down over the past 18 months. Rightly or wrongly, I have faith in Nick and his pals to deliver.

Interesting. M&A activity on the increase...

http://www.miningweekly.com/article/first-quantum-is-said-to-offer-700m-for-zambia-mine-2019-02-05

Musical chairs, and there aren't too many good-sized chairs!