Arc Minerals – Patience pays off! #ARCM
I first covered Arc Minerals back in November and suggested that the shares were a bargain. Mr Market didn’t agree as the shares fell as low as the mid-2s.
(Source: Google Finance)
I subsequently suggested that the company should be renamed “BePatient Minerals”. Last week, patient investors were rewarded at last when Arc announced “Significant New Targets Discovered at Zamsort” from the recently completed airborne survey and soil sampling.
The first location, Cheyeza West, is “the most exciting of the new targets with a core 3km x 3km anomaly outlined by very high Cu values in the soils enclosed by the wider 10km x 8km Cheyeza anomaly”.
Additionally, “The Lumbeta target, the Company’s second ranked and stretching for 11km, is associated with the crest of a fold. These hinge points in a folded environment can act as mineralisation traps and form high grade deposits.”
Arc chairman Nick von Schirnding (NvS) stated:
“The two new target discoveries, which are close to 10 times the size of Kalaba, with strong soil geochem and geophysical properties/grades, is a potential game changer for Arc Minerals. We have been approached by some very large industry players and are in discussions.”
NvS stated in this Proactive interview that “we’ve had a lot of interest from parties that we’re discussing with now”. From discussions with potential parties, NvS would look for a “partner coming in with some significant capital, so that we can really drill these properly”. “Kalaba has been good and interesting…”, but “but for the majors it’s interesting but it’s not the motherload that they’re looking for”.
Board Appointment – Mr Mumena Mushinge!
On February 5th, Arc announced that Mr Mumena Mushinge had been appointed as a non-executive director. Mumena is the founder of Zamsort, owns over 11% of Arc and is a real gentleman – I can say that because I had pleasure of meeting him last year in July. Mumena also personally stopped the Chinese and others from stealing Zamsort’s assets.
Zamsort was reported to have stolen the limelight at Indaba. a premier mining conference held in Cape Town.
Newsflow that I’m looking forward to:
Commerical Scale Demonstration plant – From the above proactive interview, NvS stated that he expects to be running the plant in about 10 days or so – 10 days would be this week.
Casa (DRC gold asset) sale/JV – DRC elections were held late last year and despite some evidence of electoral fraud, the situation is stable and a new candidate has been selected who has been accepted by the international community. Now that elections are out of the way, discussions with potential acquirers can continue.
Sturec sale – Arc has had three approaches for the Slovakian gold asset – a sale would bring in cash which could be deployed into Zamsort.
Kalabe drill results – the company last released drill results towards the end of November. I wouldn’t be surprised to see more results announced by the end of Q1.
Zamsort JV/earn-in – NvS has repeatedly stated that there’s interest from major tier 1 miners. Were Arc to be offered or to structure a suitable deal, the news could transform the company’s future as targets could be drilled without diluting shareholders via equity placings.
As a long term shareholder in Arc, I continue to believe in the management, assets and opportunity, and I look forward to what the rest of 2019 holds.
At the time of publication, the author holds a long position in ARCM