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Lantier - "Great analysis TC" Suggest my analysis has much more substance than your missive! I nearly called it utter garbage but thought I would be nice. Think about what you stated. It's counter intuitive.
"Dilution was irrelevant in the global scheme of things and those that participated were not diluted at all." Utter rubbish.
"but directors invest their own money in deals all over the place.." Didn't see much invested in ARC from 2020 until the recent placing. Also did the Directors invest cash or convert the outstanding debt?
Surely if there was a rig they would have photographed it. The man asleep in the chair tells a story. Pictures and words and all that!!
Malafuster - I wouldn't be so sure. If they get a clean bill of health from the skilled persons report maybe it's a good time to buy. If they do not and the skilled person suggest perhaps enhancing systems & controls, the costs associated with that, FCA might insist on remedial action and possibly fines this could turn out badly.
If no drilling news I think 1.5p - 1.55p by end of next week. Slightly more charitable!
40p Lee. It seems we are living rent free.
At least post something pertaining to the company. Your snide comments just eat you up and disrupt the board. Chill out!
TNR - "I had just forgotten how adept you were" - Praise from the almighty one, the worm has turned, he has been rather conciliatory today. I feel a love-in coming on!!
"Only lose if you sell" - A strange way to consider performance.
I suppose it depends on what the skilled persons uncover and the remedial action they suggest. There is also generally a lot of interaction with the FCA during the process. FCA tend not to respond in a timely manner which will add to the timescale.
So issue new shares plus a warrant to raise money, buy existing shares, cancel the bought shares and therefore write off the money used to buy said shares. So the cash/asset leaves the balance sheet. Genius. What a way to create shareholder value!
Net/Net the Tingo investment is a better outcome. As they say in Denmark - Logik til kyllinger
10p will value the company at c. £150m. Not a chance.
All ARC has is an interest in a JV it doesn't control and probably future funding required for Botswana and ongoing OPEX.
DG - Spot on. If there is also a significant number of warrants outstanding that could also impact future placings too. Has anyone seen the warrant instrument?
Poorly thought through placing IMO.
So I presume he is not on the Board of the JV?
If I were a shareholder I would consider he is overboarded and be writing to the NOMAD and AIM reg. Do ARC have an overboarding policy?
"Travelcard is not involved and yet he has a view on value" - If I were considering an investment, why wouldn't I have a view on value?
"He wouldn't buy the shares post the placing even though the company is now fully funded" - I don't believe the company is fully funded. It is only funded from the JV perspective and that's assuming AA decide to continue. Re funding - If they want to develop Botswana IMO ARC will need more capital.
"the share price is much lower than it was before the period leading up to the placing" - The company was overvalued. It had a working capital deficit which was obvious. I have consistently said when is the placing going to happen for the last 4 to 5 months. Last week - et voilà, a placing is announced.
My principles on EV & corporate finance are easy. Post the new placing shares being admitted to trading on AIM - for ARC to get to 3p it will have a market cap of £42m. Overvalued for a company that only has a percentage of a JV which it does not control. Plus it will probably have increased overheads due to Botswana.
For this to get to 5p (without warrants being exercised) £70m market cap. Again, overvalued for a company that only has a percentage of a JV which it does not control.
To get to 10p, by the time last weeks placing warrants have been exercised, additional placings to fund Botswana and additional CAPEX/OPEX leads to a market cap of c.£160m - £170m and still not a pound of copper produced. From an EV perspective the numbers just don't work and that doesn't also take into account LTVM. Show me an early stage copper exploration company that has similar characteristics to ARC valued at £170m? I won't hold my breath!!!
The institutional investment universe for natural resources companies is quite a small and a close knit network. If ARC is a slam dunk, why wasn't the placing underwritten by a known natural resources investor? EV, that's why. Transformational deals in the mining world are not kept alive with a retail placing, that tells you all you need to know.
Sorry to disappoint you Seis - I don't post on any other boards - too busy.
BTW - I am neither long nor short in ARC and post the placing would certainly now not invest. It was a hatchet job for shareholders and continues the gravy train for Directors. The warrants were the giveaway. Why price them so low when this company has signed a supposedly transformational deal?
There will be selling pressure and dilution aplenty here, plus most probably further placings to fund Botswana. Time you took your fixation away from the cadastre and licences and focussed on the cap table. Work the numbers out, from a future EV perspective, it's a mess.
I couldn't agree more with John Meyer. He will I am sure also have had more than a few meetings with the BoD. Surprised it took him so long to work out.
One course of action if you want to go down the legal route would be a Derivative Rights Action.
HarChris - "Well i'm certainly glad it's institutions only."
I would hardly call Shard an Institutional Investor. All they do is write a ticket and sell on to their retail clients. My understanding is they were in for about £2.2m of the placing. By the time that's been split down into average £5k chunks all you have is another load of leaky holders who won't hang around too long.
“Members of the public are not eligible to take part in the Placing.”
I think that shows the contempt held for smaller shareholders. It's not difficult to put a corporate action out and give existing shareholders the option to subscribe if the will of the advisors & company is there. Share certs too, probably to stop any short term flippers!