ARC Minerals (LSE:ARCM) — Update on the Company’s upcoming drilling programmes in Botswana and Zambia

0:00 Good afternoon, and welcome to the ARC MINERALS LIMITED update on the company's upcoming drilling programs in Botswana and Zambia. Throughout this recording meeting, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your question and press send. Due to the number of attendees on today's presentation, the company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Nick Von Schinding, executive chairman. Good afternoon. Well, thank you. Good afternoon, everybody. We are today on the cusp of a very, very exciting time ahead for shareholders. Much awaited drilling program with Anglo American in Northwest Zambia is about to commence.

0:52 Given the late closing of the JV in November last year, we drilled only one but very deep stratigraphic hole to better help us analyze the geological structure of the Chiesa target. Drilling is expected to start once a little bit of further ancillary work has been completed, and then we should have a clean run of at least six months through to circa December. The Anglia team is hugely excited as are we. Why do I say this? Because the early analysis confirms Chiesa to be a very, very interesting target with evidence of many traps, which Vasily, who's with me, will elaborate on shortly. The rains came reasonably early, and while large swathes of Zambia experienced drought like conditions, the Northwest did have heavy rainfall throughout from December through to April.

1:48 The good news is conditions have dried up. Vasily and the Anglia team were up there last week. And it it's you know, all all all systems go. The the camp is is now set up, and associated areas are getting drill ready. So a very, very exciting time. I know many of you will ask how many rigs, what is the timeline, how long for assays, etcetera. Look. This is information you will appreciate. I can't yet elaborate on. We're in the hands of our partners, but I can assure you that should, I hope when, we hit intersections of interest, the ability to expand on the number of rigs sorry. Look, I can assure you that I I hope that when we do hit intersections of interest, we we we absolutely have the ability to expand on the number of rigs that that we can get, And we've already taken steps with the with the contractor to ensure that that we have quick access to further rigs.

2:48 So that that that is that that's a given. The assay results turnaround, as many of you know, take a minimum of six to eight weeks. As we get them, we will naturally update you and the market. But please bear in mind that that starting the drilling doesn't mean getting results overnight. So I can't give you any targets and timings. We get started, you can probably just as well work out broadly the sort of results timelines in terms of when we get these results back from the labs. I can assure you, and and please remember this, that you and we and Anglo are just as keen as anybody to get these results back. So there's everything to play for here. And as in when we we get these results, we will disclose them, obviously.

3:38 Turning Turning to to Botswana, we are almost drill ready with tenders for drillers having gone out. The last pieces of the survey will be completed next week, and we'll get going with our drilling soon after that. I appreciate these last few months have been a long wait over the rainy season. We haven't been helped either from a market perspective by a seller of our shares in a very weak market, but we are now in the best possible position. One of the most exciting JVs is about to start drilling. A second, albeit smaller, drilling campaign in Botswana adjacent to a major operating mine in in Comacao is also about to start, and we're in a strong cash position to take advantage of assets that may come available as the scramble for copper assets worldwide takes on a new impetus.

4:30 And you only have to look at the price of copper and the firing gun in terms of m and a and the copper mining sector that no doubt you're all aware of. Happy to take questions later on on on this. I know that there have been a few questions submitted. But, ultimately, it's it's all extremely good news for copper and therefore for ARC as well. Ladies and gentlemen, we're now at one of the most exciting juncture certainly since I've been involved with ARC with a major drilling program with one of the most respected and largest majors involved in driving this with us. So I look forward to a very, very, very exciting future ahead. As I said at the outset, Vasily, our Karelas, our chief operating officer, is here with me, and I'm gonna ask him just to say a few introductory words before we take a a few questions.

5:24 Thank you, Nick. Good afternoon, everyone. In Zambia, leading up to the signing of the joint venture last year with Anglo, they were already active on the ground carrying out geological mapping and ground based geophysics assisted by satellite imagery to structurally domain and geochemically characterize the areas in the license that they were looking at so as to identify mineral system elements on a basin wide scale. The ground based geophysics was gravity and MT, magnetolorics, that were mainly over the area.

6:10 And once the joint venture was signed, as we all know, Anglia commenced with the joint venture's first diamond drill hole that went down just short of a kilometer, 930 meters. The purpose of this first hole was to primarily understand the geology and identify stratigraphy that may be conducive to metal concentration. Additionally, the importance of drilling these deep holes is to validate the geological interpretations and also to refine the exploration strategies. The diamond drill hole was collared quite high up in the stratigraphy and then Guba formation and intersected four stratigraphic packages.

6:59 The lowest being the siliclastic stratigraphic horizon being the lower own, while the overlying units included the Upper Rhone, Wausha, and, obviously, the Incubo formation in which it was collared. Draw core from this hole displayed evidence of metosomatism with the intensity increasing with depth, and more importantly, provided evidence of fluid flow within this part of the basin where the hole was being drilled. Initial indications from this hole, and that's just the first hole that they've drilled, are that the area is not only prospective for copper, but also for nickel, which, to be fair, is probably not unexpected given that on the other side of the dome, first quantum are mining copper and nickel at present from their Sentinel and Enterprise mines, respectively.

7:54 Addition to preparations at Chiesa, there was work carried out at Musuema, including, you know, a similar sort of approach with ground gravity surveys, ground empty surveys, geological and structural mapping, sampling, etcetera. Although this work was initiated, a lot of this pre drilling work remained unfinished at year end and will now recommence when the team gets to site preparation for this year's drilling at that target. There will be you know, Angler will continue with this systematic approach of mapping geophysical survey sampling this year across the rest of the license area so that additional areas can be part of the drilling and test and testing.

8:44 At Botswana, through our subsidiary company, we have to date completed soil sampling programs as well as a scout drill hole program, which entailed 12 rav holes, four RC holes, and two diamond drill holes, which were primarily drilled to confirm the lithology structure and potential mineralization below the underlying Kalahari sand color. The scrub program drill program confirmed the presence of the interpreted Dakar and Mwakopan formations that stretch for circa five kilometers across the license, effectively linking Komakau's existing zone 9 deposit to their recent Moana discovery that are located on either side of our license boundary.

9:31 It is at at or close to the contact between these two formations, the the Dakar and then Guacopan, where one typically finds economic grades of copper mineralization in the KCB, in the Kalahari Copper Belt. So to assist in refining the drill locations, we commenced with a ground based IP survey this year that initially started off with a a 35 kilometer 30 to 35 kilometer push and shrug clearance exercise along which the we went to the lines the geophysical survey lines would would would be run. And the reason we had to the reason we've decided to go down the throat of the IP survey is, as I mentioned earlier, we we've got between 20 to 30 meters of Kalahari sand cover that's basically masking the underlying geology.

10:26 This survey is almost now complete, and we expect to be testing the targets generated by the survey with the first phase ARC draw program that should commence towards the end of this month. I think I'll hand over back to Nick now. And if there are any other queries related to the program, we'll be happy to answer them. Alright. Thanks, Vasily. So, yeah, look, we've had numerous questions, and I'll I'll I'll run through them. Some of them are naturally repeated. So what are the key milestones over the next few months? I think, you know, Botswana is probably first in terms of news flow.

11:11 As I say, we we're we're agreeing the sort of final terms now with with a number of drilling companies, so we'll make a decision on that. And then in the next few weeks, we'll start drilling. So that's really the first milestone, and then obviously we get the results back from those. We will clearly keep you very closely updated in terms of the drill plan as and when we get them from Anglo. But again, drilling is imminent over the next few weeks. They do have to complete some ancillary work, which Vasilis touched on. And that all is entirely sensible because after all, they and we are keen to, once we deploy the rigs, to be drilling in the right area with the right sufficient data as much information as we can gather ahead of that. So be patient.

12:09 Is about to kick off. So and then, obviously, in due course later in the summer, we will be getting the first results from that drill program that in in Northwest Zambia. So but a a lot of milestones to look forward to. It's all about to get started. Another question here. Has Anglo shared or do they plan to share the drill plan with ARC? When can we expect this to be shared? I think I think I've I've covered that. You know, I sit on the board of the JV. The facility sits on the technical committee of the JV. We're both, you know, very, involved with with Anglo and and and the team.

12:59 So we we will we will update on that as when. Still on the the project in Zambia, how big do you think the copper find could be? Are there any predictions? Look. I I I mean, I can't answer that for obvious reasons. We don't know. But, you know, if you if you look at the sort of surrounding operating mines around us, you know, they said it could be very good indeed. Could Could you you explain the Zambian licenses and the large scale mining licenses? Look. These these are large scale mining licenses applications.

13:46 You know, clearly, there is a process involved in in in in getting the final mining licenses awarded and this this involves, you know, not least doing an environmental impact assessment, a a mine plan, defining a resource, and so on. So that all follows, but, obviously, the drilling is the most important next step for us. So but but, you know, we're very pleased with the outcome on from from a cadastre perspective and where we are with our licenses. So that that's excellent. Vasily, there's one here. Do and you have any plans to build the ground further to enable drilling to continue into the next rainy season?

14:37 No. We we we will see, I guess, and that'll that'll be dependent on on the results of the program that they're doing. I mean, I do know that they they are covering a significant chunk of the license this year with that systematic survey. And I you know, if if they do happen to make that get that discovery hold this year, then for sure, I'm sure they'll do their utmost best to see if they could build throughout the year. And Musueva might be Musueva will be easier. It's it's over it's closer to the main road. You don't have as much forest to to go through to access it. So theoretically, one could actually draw from the swimmer all year and be easier to do than than she has at the moment. Alright.

15:25 Next question here. Why did the company not raise between three and four p? And do you agree this process was mismanaged? Look. Let me say a few words on this because, obviously, it's it's it's a, you it's know, it's a it's an area that that, you know, has has garnered understandably a lot of noise and feedback. So, you know, first of all, when we completed the Anglo transaction in in sort of, what it was, late last year, the board did consider whether we should, at that stage, raise further funds. And the decision taken, which I still believe was the right one, was that we we should not, and we should allow the share price to get traction post the the announcement from Anglo on Anglo, which had which had, you know, been been delayed, you know, mainly due to the sort of legal regulatory issues and then the final negotiation with with and and, you know, with with a fantastic outcome, I might add, for ARC shareholders. So but, you know, so we decided not to.

16:32 In hindsight, had I known everything that was about to unfold in terms of this very large institution that then began to offload a significant amount of their stake in a in a very undisciplined manner, Of course, they would have raised at at three or four p. That that that is clear. But, you know, life doesn't work like that. Secondly, you know, I have a duty and the board has a duty to ensure that your company is able to survive in any situation that might be thrown at us. And part of that is to ensure that we are properly capitalized in terms of our cash resources. And we look at the downside scenarios as well. I mean, if if if if our joint venture partner walks away after the first month, yes, we have some cash flow upfront, but, you know, what happens for the next few years?

17:24 And so, you know and in fact, one shareholder emailed me the other day in relation to the sort of, you know, the the latest offer or bid by BHP for Anglo American. You know, what what happens if, you know, all of this results and and, you know, the project being abandoned? You know, it's it's precisely for that reason that, you know, we we we do need to be properly cashed up for for to to cover us for any eventuality. And and so I have, you know, no qualms about ensuring that that we are proper properly financed and and we are. So, you know, that that is the background. It also, of course, gives us, most importantly, the ability to look at other acquisitions in the copper area. This is, as I said at the outset, a a scramble for assets. This almost is like the sort of gold rush equivalent, you know, in California at the turn of the century whenever you know but Zambia is is, you know, is is absolutely on the on the highest priority target list for, you know, numerous major mining companies. So we are looking at opportunities there. We also are being as as you probably know me over the years, we are being very disciplined and we did look at a at a very exciting opportunity, but we were essentially upbeat

18:54 and we're not going to we're not going to play that game. But, you know, we we think some assets might come back. So watch the space. But but we're gonna be very disciplined on that in terms of of of our strategy. And, of course, I would have liked to have included more shareholders, retail shareholders, and I know that's a contentious point and something I have raised with our our brokers and, you know but but we were restricted in terms of of the structure of this of this raise. But, you know, again, we have raised a significant amount of money, and it's it's it's, you know, it helps you sleep easier. You know, we are very well capitalized and, you know, assuming the the Anglo JV continues right through to the to the the the final terms and the and the and the 8,000,000 bullet payment, this does see us through for for a very extensive period now and and that's great news.

20:03 Just another question here. The company communications have been extremely poor. You need to do a lot better. I I I don't disagree. You know, the the the drillings the commencement of the the drilling has taken longer than expected. You know, we have had excessively wet conditions up in the Northwest, which I'm glad to say have now dissipated, and Vasily was up there, and he can comment on a sec. You told us this is the start of a a news rich period, and I I stand by that. But, you you know, know, we're not going to manufacture news for the sake of it like, you know, 98% of AIM companies. When we when we have something to update like now, we will update. So rest assured, with two drilling programs about to commence, we will have an active period of news flow.

20:57 As I say, at the outset, you know, the assay results do take time, so, you know, please bear that in mind before sending us reams and reams of emails. Going back to the question on on the PR, look, we we I have asked for a refresh of all of our advisers during this period. You've seen we've changed our nomad. You've seen we've added an additional broker in the form of shard. You've seen that we've also hired a new PR agency to assist us. So, you know, we're we're we're we're we would take the the the brickbats and and the few bouquets we occasionally get, and we it's not falling on deaf ears.

21:44 We will improve, you know, as as as much as we can. So I I appreciate that. It hasn't been easy, and I also appreciate your email emails directed to me. I attempt to answer as much as I as I can within sort of the proper disclosure parameters. And, you know, as I say, expect an active period here from here through to to towards the end of the year. A question here on the Angular BHP transaction. What concerns does the board have BHP will walk away from the current joint venture? I'm not going to clearly comment on on a a sort of potential transaction that may or may not involve our JV partner.

22:31 I think the only important point here is that, you know, the the absolute key focus for BHP and Anglo and frankly every other major outside of the gold sector that plays in the base metal sector is that copper is the as the metal to to target, and you've seen seen the the price trajectory of copper. It's clearly telling you something. I personally believe that we are at the beginning of a super cycle in terms of copper with dwindling new mines and reduced capacity in terms of existing mines. There is a scramble for assets, as I say, for copper, and it really to to my mind, it it's irrelevant, you know, who our JV partners are in terms of this transaction because I think given the interest we've had from other majors prior to this Anglo JV transaction, we know that others other majors are extremely extremely interested, interested and and that includes BHP. So I'm I'm not in in the least concerned about any of that.

23:41 And I might add that I'm, you know, extremely happy with JV partners, Angular. We we we have an excellent close working relationship with them, and I I am I'm I'm just couldn't be happier with with our our partners here. Vasily, this is probably you. Have Angular released details of the first deep call? Has Angular seen data from the call from the box scan? I think you've had covered I mean, as I said, I mean, they're following quite a systematic approach, and, you know, know, they're they're they're using that you know, they're they're sampling everything. They are doing the geophysical surveys. They're doing the gravity surveys all ground based. So they they're following a very methodical, systematic approach.

24:29 You know, at the end of the day, we you know, it's not exactly like trying to find a needle in the haystack, but you've got 870 square kilometers of of ground that needs to be covered. And you need to try and understand what's what's happening in the basin and the sub basins and where potentially the reductions are, where the and where potentially it's floats to pool and and and and and deposit all the the metal that's in solution. So they're using all that data from the back scan, from the box scan to to sort of guide the the programs going forward. Okay. Thank you, Vasily. Another question here. What are your comments on the share price? Look. I I've always said, and I still believe that it's not appropriate for management to comment on the share price other than you know, I will say it's obviously been a a very tough market generally, particularly in the junior mid cap space.

25:28 But, you know, as I said, we're on the cusp here of a significant amount of news flow going forward. So I certainly hope and you've seen I have acquired shares as as our CFO recently. And And as as and when, you know, we're able to acquire more shares, I'm I'm I'm sure we will. You know? And and you've seen what we've put in in terms of significant amounts by other board directors in in respect of the recent capital raise. Vasili, can you comment on this? Do you wanna read that one on Botswana? You looking to secure a partner for the Botswana licenses, and when are we going to see some results from last year's drilling campaign? Well, we we did put out some we did put out an announcement on on on that early on, I think. So that's been done.

26:29 At this stage, we we're not looking to secure a partner. Those lice I mean, the the license is actually quite strategically located. For those who are not aware, the Komakar Mining, which is encompasses or, you know, basically, our license set amongst their package of licenses, has recently been acquired by MMG for $1,900,000,000. They're looking to ramp up production from 60,000 tons per annum, what they're doing at the moment, around 20. And for them to do that, they're obviously gonna have to convert a lot of their exploration targets into deposits and then into mines. And we think that this prospecting license 135 that we're doing the work on at the moment is sitting quite pretty in between two of their targets or two of their deposits that they've discovered or one the discovery and one's a target.

27:25 So that that's actually quite exciting because, you know, there could be potentially quite an interesting solution to that one where that we we look to sort of pick up the background or alternatively, they'll come to us time and tell, and it will be driven by the results from the this current program. Alright. Thank you, Vasily. Somebody questioned we we or I have opened up previous investor calls that this is an incredibly exciting time. Yes. I have. And I have no qualms about doing so because I believe we are absolutely at an exciting period as we were when we finally signed the Anglo joint venture, which I will add is the most exciting and the the the best, most significant drill program ever concluded with a major. Now, you know, has the drilling begun? No. But will we like to celebrate what we've achieved in terms of the deal that we've done with Anglo American?

28:27 So I stand by what I said in December. I stand by what I say now. We are at the cusp of very exciting period. Remember, folks, we haven't started the drilling campaign. This is the most exciting prospect prospect of of copper terrain in certainly in Africa, probably the world. If you look at the scramble for assets in Zambia, you look at the number of majors involved in Zambia, and we are sitting on very, very desirable tenements that we're about to start drilling. What's not to like and what's not to be excited about? So everything to play for, and I can assure you you you your team here is is extremely positive and excited about to start. So watch this space.

29:15 So the other question was, I've we've got just on the on the ticker here is why didn't we mention the our joint venture partners by name in the in the press release? This is really technical. We we do require approval by our partners, Angler, on whenever we do mention Angler in any sort of meaningful way, and we simply weren't able to get that approval in time. And so that that's the reason. There's there's there's no other there's no other reason than that. Yeah. Yeah. There's another question here. Can you comment on why you chose to use ARC drilling instead of diamond core drilling at Botswana?

30:01 And what is the advantage of this approach for the current drill program? The main reason is the speed. You know, the the 2,000 meter drill program will be able to knock that out in a month. We, you know, we did we did do a small diamond drill hole program last year or the the the first the first start drill program had some diamond drilling in, so we we we we we're fairly happy that the geology is right. And so now with ARC drilling, it's cheaper, it's faster, and we'll be able to get results back a lot quicker. So, you know, at this stage for at at the stage which the the project's development is, you know, we feel that's the appropriate approach to to sort of get some information from from that project. Alright. Alright.

30:47 Thank you, Vasily. A question on the the asset that we disposed of in the DRC, the CC. As as you know, there are two two parts parts to to this. This. One is is the Avanti stake that we have due. It was a listed company in in in Canada. They are still busy finalizing their fundraise. I can't say really more than that, but we're assured that discussions are ongoing. You know, as you you probably all know, the ARC is not the easiest jurisdiction in the world, so it didn't surprise me that they've taken longer than than we had hoped to to raise this money.

31:37 So and and, obviously, some of the the the the other stake that that we took was the the shares in Tingo. I know, we we did our DD as much as we could. It was a listed company. We have launched various claims against Tingo until this gets sorted out. It is subject to to an investigation by the by the SEC in The US, and we'll have to wait and see. Am I satisfied we got out of the DRC? Absolutely. The the cost of running this, if we had held on to it, let alone sell it, would have been in the in the, you know, potentially now double digit millions of figures. It's a very, very expensive ongoing operation to run.

32:29 There were historic creditors. And, ultimately, it was absolutely the right decision by the company to get out. Now, hopefully, we will realize further value both in terms of particularly in terms of the Avanti transaction. And and they've left, you know, they're they're advised by so Sam Jonah, who's a very reputable former chairman and CEO in in the gold mining industry and and a number of the other individuals and and I've I've every confidence that they will sort something out here over the next few months, hopefully. Anyway, we we, you know, we will await update from the vanity as of when.

33:16 Question. Can we get pictures from the site? I think, Priscilla, you were after you took a a number. That's not a problem. We can get those pictures put out there onto the Twitter feed. That shouldn't be too much of an issue. Think that might actually already be people jobs, so it might be out there already. Good. I think that probably covers all of the the key questions. In terms of the targets, I think we've we've touched on this. I mean, yes, there are going to be two targets being drilled over the next few months, and that you know, as soon as touching on that, that's both, both, you you know, know, and as as we we we, you know, get into the process, we'll obviously give you more detail on that.

34:18 Fantastic, Mick. Thank you very much indeed for covering for those questions. You can, of course, the company will be able to review all questions submitted. And we'll publish responses where appropriate appropriate to do so on the investor meet company platform. Perhaps just before redirecting investors to provide you with their feedback, know it's particularly important to you and the team. Nick, I could just ask you for a few closing comments, please. Yeah. Well, look, thank you for joining. You know, I think there's everything to play for. The drill season is about to commence both in Zambia and Botswana, and we are staying very actively involved in terms of trying to be strategic and and and and nimble footed to acquire potentially another exciting copper asset in Zambia.

35:05 But but we we we we remain active there and we hope to report something back over the next few weeks and months, but we're gonna be very disciplined in that. But rest assured, we're we're we're very active. We're looking at at all kinds of potential opportunities. So with that, very happy to to to end this call and very happy as well to respond to any further updates, email questions that that you guys might have. Thank you very much, and good afternoon. Fantastic. Thank you very much indeed, Nick, for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback, nor the team can better understand your views and expectations. This will only take a few moments to complete, and I know it'd be greatly valued by the company. On behalf of the management team of ARC MINERALS LIMITED, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.