Joel’s Resource Report – Signs of life! #ARCM #ARB #RRE

Joel’s Resource Report – Signs of life! #ARCM #ARB #RRE

Another week and the markets are continuing to see-saw. Thankfully, there are a few signs of life in the resources space, even if share prices haven’t started to reflect the underlying value.

At the time of writing the author holds long positions in the stocks discussed

Arc Minerals (ARCM) – discoveries galore!

Arc Minerals is an AIM listed copper exploration company whose primary asset is massive acreage in Zambia. This week Arc announced another discovery at its “Muswema” prospect. It was a timely announcement as one of the largest mining conferences Mining Indaba has just been held in Cape Town (which Arc attended).

Arc also announced drilling results from Cheyeza East. Best intercepts included 1.34% Copper from 17 metres underground for over 17 metres. This is near surface and therefore more economic – it could be accessed via an open pit develoment. Open pit mining is cheaper than underground mining!

Argo Blockchain (ARB) – options for the boys!

Argo Blockchain is standard main market listed blockchain mining company. I covered Argo for Cube in depth last week. Argo is in the process of deploying thousands of machines to mine bitcoin and they have announced that they’re ahead of schedule with only 500 machines left to deploy. They also generated revenues of £1.63 million in January – excellent news!

Unfortunately, Argo also announced a grant of share options for directors and senior managers at near the current share price. The options are exercisable until 2030 – no rush to exercise them anytime soon then!

There is one element I like about the share options – they begin to vest in 3 months and vest over a 21 month period – this means that the directors and managers need to stick around to actually get them – good!

I’m not thrilled about the option price but the investment case hasn’t changed and 2020 will be game changing for Argo given the mining power it now has!

RockRose Energy (RRE) – another string to the bow!

RockRose Energy is a standard main market-listed oil & gas company producing over 20k boepd. As regular readers will know, it’s my largest holding and currently trades below unrestricted cash in the bank – the oil & gas production is for free!

RockRose announced the acquisition of 100% interest in the Cotton gas Field (formerly “Carna”). RockRose stated:

“The field was discovered in 2009 by well 43/21b-5Z, which encountered a gas column of up to 1,260 feet over six gas bearing sandstone units. Speedwell estimates Cotton contains recoverable gas resources of 97Bcf (16.7mmboe) and has the potential to produce at a peak rate of up to 70mmscf/d (12,000 boepd) from two horizontal development wells.”

Whilst the asset is non-producing and therefore not likely to move the dial in terms of share price appreciation today, this could eventually be a significant asset. Just like the Arran acquisition (which was nearly free).

Executive Chairman Andrew Austin has added another development asset to RockRose’s portfolio – an excellent move which in time could blossom further.

Till next week!

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    Hi Joel,

    With regard to ARB – do you have a view on the lifespan of the mining machines in use?

    Cheers

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