Arc Minerals to Sell Stake in Casa Mining to Private Equity Group

Arc Minerals (LSE:ARCM) has officially sold its 99.43 percent stake in Casa Mining to Century Capital Management, a private equity group, for consideration payable of up to US$9.8 millon. 

The sale is expected to close in January. The company may also receive an additional US$2.5 million in the event that Casa Mining increases in value in the five year period following the sale. 

“The transaction brings significant cash resources to Arc and at the same time removes ongoing opex. Crucially, it allows us to focus on our exciting Zambian copper development where we are making excellent progress both on drilling and commercially developing our plant,” said Nick von Schirnding, chairman of Arc Minerals, in a press release.

Through the sale of Casa Mining, Arc Minerals will lose its 73.84 percent stake in the Akyanga gold deposit, its 66 percent equity interest in Zamsort, which is a company focused on a copper license in Zambia, and its 100 percent ownership of the Kremnica mining license.

This sale is a part of Arc Minerals’ push toward becoming a copper-focused company.

“As I have set out many times, we are clear on our vision in turning Arc into a focused copper play — this is a major step forward and we will continue all efforts to dispose of the remaining noncore gold interest, namely Šturec in Slovakia,” said von Schirnding.

Since the announcement of the sale early on Wednesday (November 13), Arc Minerals’ share price has fluctuated considerably, ending the day on a low note. Arc Minerals closed the market trading at GBP 270 on Wednesday; at market close on Tuesday (November 12), it was at GBP 288. The company hit its low of the day at 3:45 p.m. GMT when it traded for GBP 265. 

Copper has had a turbulent year as protests in South America have rocked production goals for local miners. But many analysts see electrification moving prices upward in the coming years.

“… 2020 may be a better year for copper, but I think a higher copper price really depends upon supply disruptions in Chile or Indonesia coupled with the inexorable increased demand from electrification over the long term,” Chris Berry of House Mountain Partners previously told the Investing News Network. 

“I can see the market tightening over the longer term should the current economic expansion continue, coupled with increased demand from the electrification theme, but this is not an imminent turn.”

At market close on Wednesday, Arc Minerals was trading at GBP 270. Copper was changing hands at US$5,837 per tonne on Tuesday. 

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Securities Disclosure: I, Sasha Dhesi, hold no direct investment interest in any company mentioned in this article.