The ARC Minerals Ltd (LON: ARCM) share price fell by 6.21% after releasing its annual report for the 12 months ended 31 December 2022. The report highlighted the progress made by the company in securing a joint venture agreement with Anglo American regarding its operations in Zambia.
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The company also revealed that it was reorganising its licenses in preparation for the joint venture with a subsidiary of Anglo American, as announced on 20 April 2023, including renewing or replacing licences as appropriate.
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ARC Minerals also reiterated its business strategy of ensuring a high-quality project pipeline, a highly qualified and experienced team with a proven team track record of finding resources and building mines, and a supportive institutional and retail shareholder base.
The dynamic junior exploration and development company focused on exploring base metals, principally copper, in Africa noted that the past year had been dominated by discussions with a subsidiary of Anglo American plc (“Anglo American”) to structure and finalise a joint venture in respect of the Company’s copper interests in North Western Zambia.
The joint venture deal was first signed in May 2022 when ARC Minerals and its partners agreed with Anglo American to form a joint venture. The deal was finally formalised on 20 April 2023 with the signing of a joint venture.
However, some precedent conditions must still be met before the joint venture agreement can come into force. First, Anglo American will retain a 51% ownership interest (Phase 1) in the Zambina project after investing $24 million into exploration activities on or before 180 days after the third anniversary.
Anglo American also has to pay Arc Minerals’ subsidiary Unico $3 million upon signing the joint venture agreement ad must satisfy all the conditions precedent while paying $1 million annually for the next three years, with a final payment of $8 million by the end of Phase 1.
The company will then acquire a further 9% shareholding after investing $20 million into exploration activities as part of Phase 2. At the same time, in Phase 3, Anglo American will get the remaining 10% pushing its stake to 70% by investing $30 million.
*This is not investment advice.
ARC Minerals share price.
The ARC Minerals share price plunged 6.21% to trade at 2.72p, from Friday’s closing price of 2.90p.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.