Exploration and mining firm Arc Minerals (LSE:ARCM) has secured a major investment from Scottish businesswoman Ann Gloag OBE, founder of international transport company Stagecoach Group. Gloag has acquired a 3pc stake in Arc worth nearly £500,000 at its current share price. With an estimated net worth of £1bn, Gloag – also a well-known philanthropist- is one of Scotland’s wealthiest business magnates.
Arc, which raised £2.5m last week to help fund its acquisition of a 49pc stake in the prospective Zamsort Copper-Cobalt Project in Zambia, saw its shares jump by 10.9pc, or 0.3p, to 3.05p following the news.
Following the news, Gloag said: ‘I was happy to participate in Arc Minerals’ recent share placing in support of the Board’s growth plans including the development of the Zamsort Copper Cobalt project in Zambia. I have long believed in the regeneration of Africa through investment and commercial development and have supported this through both my charitable and commercial activities. My investment in Arc Minerals is fully aligned with this philosophy. I look forward to progress being reported over the coming months.’
Nick von Schirnding, executive chairman of Arc, said: ‘I welcome Ann Gloag as a major shareholder in Arc. We are at a very exciting juncture and I am confident that as we deliver on our strategy we will generate significant value for all our stakeholders.’
Recent activity
Zamsort’s exploration licence encompasses nine of the 30 high priority targets ranked by a previous Anglo American/Equinox Minerals joint venture in Zambia. It has an existing, near-surface, estimated copper-cobalt oxide resource of 16.59Mt at 0.94pc copper, with a historical exploration target of 150Mt.
Arc expects production of copper and cobalt hydroxide to begin within six months. Processing will take place at the site’s commercial-scale demonstration plant, which is approximately 75pc complete. As it stands, the business has already stockpiled 10,000 tonnes of screened ore grading 2.1pc copper and 0.3pc cobalt at the site. Arc is also in the process of building a new management team at Zamsort who will be undertaking a full assessment of current operations including historical exploration data and optimising the plant.
In a call to investors last week, Von Schirnding said to expect drilling at Zamsort to begin ‘very soon’, adding that Arc would spend around $500,000 on developing the site’s plant and up to $1.5m on near-term drilling. He added that Arc had been approached by several private equity groups and large mining groups since word got out that it was planning to increase its stake in Zamsort. However, he said the firm is no rush to pursue these:
‘We have had some approaches from potential joint venture partners, but I am not in a hurry to involve them at this stage. We need to do our work and need to get drilling to see what is there. Zamsort is one of the most outstanding copper/cobalt opportunities in Zambia, and what this interest has underscored is that we do have an exciting asset with a great opportunity for exploration.
The business also owns a 99pc interest in Casa Mining, a private firm that owns a 71.3pc stake in the 1.5Moz Akyanga gold project in the DRC. Von Schirnding told investors that the business eventually plans to scale back investment at Casa, having already spent $30m in the area according to its most recent presentation:
‘We will continue to do some modest exploration work at Casa as several exciting targets remain. We are coming to the end of upgrading the resource, and I would hope by mid-May or early-June we can report back with figures.’
He also said Arc is also working on divesting its non-core assets, which include its 100pc-owned Sturec Gold Project in Central Slovakia and its Haykota Copper-Gold Project in Eritrea:
‘We are in talks about divesting non-core assets. We are not going to sit on a portfolio making no return for us. We are rattling the cage pretty hard and looking to divest those fully.’