Member Info for Turtlewax

Oooh looks like I spoke too soon! Thanks Seis!

I think digger may be referring to Nick’s use of the term application(s), as in more than one, on the AGM call.
Of course we don’t know if there are other applications as they may not be showing yet on the Cadastre, the Anglo one just appeared earlier this week, sparking this price action.

I had a feeling this might come up.

12th May 2022 RNS –
Arc Minerals is pleased to announce that it has entered into an agreement with a subsidiary of Anglo American plc (I guess we know the name of the subsidiary now, as if there was any doubt).
Under the Agreement the parties intend to form a joint venture with respect to the Company’s Copper-Cobalt project located in the North-Western province of Zambia.

The key commercial terms of the JV that have been agreed in principle in the Agreement are as follows:

Upon signing of the JV Docs a JV vehicle will be formed with initial ownership interests by AA and Arc of 70% and 30% ….

The Agreement sets out the core principles under which the JV will be formed subject to satisfactory due diligence, a restructuring of the Company’s assets in preparation for the JV, negotiation and execution of definitive agreements etc.

Nick in the IC of the same day - Anglo will be the controller and operator, but doing so in a meaningful and constructive dialogue with us as their partner.


So my take is that as Anglo are the senior partners in the JV then this licence is to be held in Anglo’s name. Remember the JV company will be set up at local level, with 3 board members from Anglo and 2 from Arc.

Also note the JV applies to all the tenements Arc own, not just this one licence area.

I would have thought this was all a part of the core principles of the Agreement signed (as set out above) and that legal and Rothschild would have closely read the agreement to make sure Arc are at no loss as a result of the licence being applied in AA’s name.

Either that or Anglo have juts snaked us and we should expect to see a termination of the Agreement RNS tomorrow. (This isn’t going to happen as this wouldn’t be within Anglo’s core principles and Nick would have guarded against it).

Anyway, its all starting to look slightly rosier!

Nice wee change to the Cadastre just for Peggy.

FUD slingers! A larger measure of Grants for my coffee!

Beware the FUD slingers. Red in tooth and claw!!

Hope you all had a fun filled Christmas!

I was fortunate enough to win a bottle of Grant’s Scottish Whiskey in a charity ballot. A bit cheap and nasty; and not at all to my liking, but it does for adding to my coffee.

As the market is about to close for the final time for 2022 I just wanted to wish everyone a Happy New Year!
What an exciting year 2023 promises to be for all Arc holders. Within the first couple of months we should see the signing of the AA JV and drill results from Botswana! And from there it should continue to get even better!
Have a good one guys.

100% correct Peggy. So going by that logic there is hope for you yet to get something right!

It’s been pretty obvious what’s cooking here! A stonking JV with a major who knows our licences well and have an excellent idea of where to drill!

Peggy, as usual you are being slightly disingenuous with your post.
You know full well the reason for the delay over the last year.
You also know that the timing of the rearrangement of the Zambian licences is out of Arc’s hands and in the hands of the relevant Zambian Department.
Happy to chat more after 8th Feb, until then don’t jump the gun!

I suspect DW knows exactly what he is getting involved in when it comes to AA and Arcm. Executing a long planned strategy.

Of course 23423 expired 26/08/22 and the legal settlement states about ‘applying’ for this area. Can’t see any application on this area.

I see this being in keeping with 18th Feb RNS. The two licences add up to just over 8Km square.

“The group will also consent to the claimant parties applying for the 8 square kilometre small mining and small exploration license areas that were previously in existence at Zamsort prior to Arc's involvement”

Duncan was also in Botswana recently. What was that rumour again?

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" Explore more investment opportunities in " Botswana - Masisi

Executive Leadership of Anglo-American PLC and De Beers Group is currently in Botswana.

Spotted with President Masisi at Office of the President today is Anglo-American CEO Duncan Graham Wanblad, Outgoing CEO of De Beers Group Bruce Cleaver and incoming CEO of De Beers Group Al Cook alongside Country Head of De Beers Botswana Neo Moroka.

According to President Mokgweetsi Masisi, the London based executives " are in the country to celebrate their 50th Anniversary of Partnership with Botswana"

De Beers Group and Botswana Government have over 50 years partnership which has birthed Debswana, a 50/50 joint venture between the two, Debswana is the world 's leading rough diamonds producer by value.

De Beers and Botswana also own (50-50) , Diamond Trading Company Botswana (DTCB), the world’s largest and most sophisticated rough diamond sorting and valuing operation, with a capacity to sort 45 million carats a year.

In addition Botswana Government directly owns 15 percent of De Beers Group, with the remaining 85 percent owned by Anglo American plc.

President Masisi says De Beers & Anglo American are welcome to explore other investment opportunities in Botswana.

"It is my pleasure to welcome them to Botswana and I invite them to explore Botswana for more investments" he said.

Apologies for posting the whole article, but did so to avoid any ambiguity.

Anglo has been meeting with state-owned companies such as Transnet and the public enterprises department to discuss ways of fixing the rot. He’s optimistic, as the country’s CEOs mandatorily appear to be, evidence of the government’s cloth-eared response notwithstanding. He, like the minerals business in general, wants to establish joint ventures with the government on freight and energy, but until there’s a signed contract it looks like a pipe dream.

While not everyone will agree with Wanblad that the government cares and wants to solve the problems, there’s no doubting his assessment when he says: “Crime and corruption are the biggest things that we really need to get very serious about eradicating, especially here. There is so much potential that we’re not getting on top of because of endemic crime and corruption.”

That’s not to say M&A doesn’t have a future role in Anglo, as demonstrated with the takeover of Woodsmith. Wanblad was also quoted this year as saying that central Africa has “some very interesting rocks”. Asked about this, he acknowledges with a grin: “Very good rocks in Africa, and I’d like to think we would be a company that would be able to do that [conduct African M&A].”

But M&A is the less preferred route to growth, partly because there’s always a risk of overpaying. Additionally, if M&A is the only growth plan, strategy becomes a servant to government mineral prospect timelines. “Then things go wrong,” says Wanblad. “You have to be opportunistic.”

The search for new business has seen Anglo return to long-abandoned former stamping grounds: in May, it bought control of junior miner Arc Minerals, returning Anglo to Zambia 50 years after the government nationalised the copperbelt. Anglo is also setting foot in Angola again following an announcement by De Beers in 2021 of plans to open up exploration there.

These undertakings suggest jurisdictional risk is falling in Africa, though Wanblad urges caution. “I don’t necessarily think they [authorities] have moved completely into a space of stability yet, but they are starting to think slightly differently and so I think there is potentially an opportunity.”

The state of South Africa

Asked if Anglo would build a new mine in South Africa, Wanblad is evasive. “As I said, like in all jurisdictions we would want to be pretty sure there was a fiscal environment that was conducive to spending multiple billions before we were able to let loose.”

If that sounds suspiciously like a no, it’s worth remarking that Wanblad hasn’t held back on criticism of South Africa in the past. He told Miningmx in August that the problems at Transnet Freight Rail (TFR) would rival those of Eskom if not addressed speedily.

Two months later he was back in the country amid a two-week strike at Transnet, TFR’s parent company, that threatened to disrupt mineral exports. It was during this visit that the lights memorably went out on him as he was delivering a virtual address to the FT Mining Summit in London, on South Africa’s prospects.

Since then, the derailment of a coal truck stopped mineral deliveries on Transnet’s important North Corridor rail route, linking Mpumalanga and Limpopo to Richards Bay. Anglo hasn’t owned coal since demerging its coal division into Thungela Resources, but Wanblad is alarmed at the rate of infrastructure deterioration in South Africa.

“When your infrastructure starts crumbling and you have no way out of that, it’s really difficult to think about how you’re going to grow and how you’re going to create an environment for the business to flourish,” he says.

The Wanblads are a mining family. Wanblad’s father, Graham, was a director of JCI, his uncle was a miner, and his grandparents had an affiliation to the industry. And yet mining wasn’t “a burning ambition” for Wanblad junior — at least not as a school pupil.

“I was originally going to be a doctor, and that’s where I had my heart set,” he says. “But as we got into university applications I quite liked what I’d seen about mining.” After being awarded a bursary from JCI, he worked on the mines during holidays. “I absolutely loved the people. It became a natural segue.”

With many mining families, childhoods are spent growing up within the mine vicinity, often in rural locations. For Wanblad, some of his childhood was spent near Consolidated Murchison, an antimony mine east of Tzaneen in the pristine lowveld of what is now Limpopo.

“I loved Cons Murch. Mom never wanted me to go to boarding school so I went to the local school which was supposed to be dual medium, but actually was Afrikaans. And so the doctor’s son and I were the only two English-speaking kids at that school. We also happened to be the only two kids who went to school in socks and shoes. I kept taking my socks and shoes off and hiding them behind the fence. Then they just disappeared and I’d go home every day without socks or shoes. That created great consternation at home, but I loved it. It was one of the most delightful periods of my life.”

After starting at JCI in 1990, Wanblad moved swiftly through the ranks. He was joint CEO of Amplats and then Carroll posted him to Santiago, where he headed the base metals division. In those days Quellaveco was just another ore body. As Wanblad describes it, “all we had in Lima at the time was a geologist, a house in the city and a back garden full of drill string core [geological samples of the Quellaveco ore body].

“However, every ore body has its day,” he adds.

For Quellaveco, that wasn’t until about 2008, when Anglo dusted off projects it had held for years. Quellaveco had been on its books for about 30 years, but it wasn’t competitive earlier, as Anglo had been mining 1.5%-grade copper mines vs Quellaveco’s 0.5%-0.6% grade.

Over time, however, as average industry grades decline, mining inflation kicks in. New ore bodies are more remote and require new infrastructure build. By 2014 early development work on Quellaveco had begun in earnest, and by 2018 — with about 50% of the detailed engineering work complete — it was approved.

That gestation period accounts for the success of Quellaveco’s technical and budgetary execution, says Wanblad. It also proves the benefits of organic growth over more aggressive styles of expansion, such as M&A transactions.

But these are skirmishes compared with the hairier industrywide concerns that raise questions over the sustainability of Anglo’s share price performance, which has outstripped all before it. The formal rejection of an environmental permit enabling the extension of Anglo’s Los Bronces copper mine in Chile is a demonstration of how political change to the right of centre or — in the case of Chile — to the left quickly changes the ground under the feet of miners.

“Permitting delays and preventative decisions across the global mining industry are highly relevant for the long-term outlook of new metals supply,” Dominic O’Kane, an analyst for JPMorgan Cazenove, said in a report earlier this year. Wanblad worries how mining firms such as Anglo can “close the loop” in terms of supplying the minerals the world requires for renewable power and electric mobility.

Beyond jurisdictional risk, there is uncertainty about the direction of economic growth, especially as China emerges from its hardline Covid lockdowns, assuming that it’s doing so. Analysts are unsure of the extent to which China’s return to full economic activity is priced into mining shares, and who wins when the country’s “bumpy” return commences, as Goldman Sachs terms it.

According to analysts at Morgan Stanley, PGM demand into China will recover — “but not as much as would otherwise be expected”, as vehicle sales and imports are already elevated.

Inflation, meanwhile, is resulting in margin pressure — though Anglo’s South African weighting is in this regard a blessing, given the producer currency advantages.

Inflation is also weighing on diamond sales. De Beers recently doubled the size of its rough diamond buyback programme, which enables it to limit supply without having to cut prices.

Google Trends said recently that searches for “diamond jewellery” and “diamonds” were at a five-year low, potentially pointing to softening buying intentions amid high inflation and economic uncertainty. Data from Mastercard showed that spending on jewellery in October turned negative for the first time since December 2020 and came in at -3.8%, against 7% growth in September.

At his inaugural results presentation in August, Wanblad described the market as “choppy”. Some analysts have used stronger terms. In a report this year McKinsey & Co said the globe was on the cusp of a new economic era typified by political polarisation, energy crises and market fragmentation.

In the shorter term, analysts expect a modest performance for Anglo in 2023.

“We continue to like the medium-term outlook for Anglo given the group’s leading project pipeline and well-diversified portfolio, but operational performance has been relatively weak, macro uncertainty is elevated and we anticipate only modest cash flows and shareholder returns in 2023,” says Deutsche Bank analyst Liam Fitzpatrick.

Demand for soil nutrients and fertiliser products is on the rise. Absolute levels of global hunger are set to be the highest yet this year, agreements to liberate Ukraine’s trapped wheat exports notwithstanding. According to the World Food Programme, there’s been a more than doubling in the number of people without regular access to food. It estimates 800-million people go to bed hungry every night.

Clark says while Anglo won’t admit it, Woodsmith is to Wanblad what Quellaveco was to Cutifani — a legacy project that will help sustain Anglo’s growth narrative. Until details of Woodsmith’s feasibility study are published, however, its relevance will remain underexposed. But it’s a potentially enormous project for Anglo, says Clark.

Assuming the project’s first phase requires $5bn in capital expenditure, that’s about 10% of Anglo’s current market cap. On an equivalent project to market-cap basis, BHP would have to spend about $15bn. That, in absolute terms, dwarfs the $5.6bn it is spending on its fertiliser project, the Jansen potash project in Saskatchewan.

“It would raise a lot of eyebrows if BHP were to spend so much on one thing,” says Clark. The implication for Anglo is that, as far as projects go, Woodsmith is a major step out.

Woodsmith also keeps Anglo true to its diversified mining company roots. To an extent, this has been lost in the big-cap mining sector amid the industrywide shareholder rebellion in 2015, following the metals price correction. Investors sought focus and capital discipline from diversified mining firms, resulting in greater specialisation. For Rio Tinto, it is iron ore; for BHP it is copper. Anglo has these minerals, but it also has PGMs and diamonds and, potentially, polyhalite.

Wanblad has had an easier ride in Anglo than his counterparts at either Glencore or Anglo-Australian company Rio Tinto. The latter’s CEO, Jakob Stausholm, rode into Melbourne on a ticket to transform Rio’s workplace culture, given the swathe of bad press the firm has received. It blew up caves regarded as sacred by Aboriginal Australians, and a report found roughly half of the company’s employees had encountered bullying in the past five years, much of it gender-based.

At Glencore, newly appointed CEO Gary Nagle has been tackling the fallout from an investigation into corruption that has cost shareholders more than $1bn in penalties.

Wanblad’s first year at Anglo has been noiseless, though pressures do exist. The outcome of new diamond contract negotiations with Botswana are unresolved. In Zambia, the company faces class-action litigation on behalf of hundreds of Zambians allegedly poisoned by Kabwe, a lead mine in which Anglo was long invested. In Zimbabwe, the revenue authority has sought to garnish funds allegedly due to it that, if payable, will damage the viability of Unki, the group’s PGM mine in the country.