ARC Minerals Ltd (LON:ARCM) Chief Executive Officer Nick von Schirnding and Chief Operating Officer Vassili Carellas caught up with DirectorsTalk for an exclusive interview to discuss the company’s latest copper assay results from Zambia. They highlight the discovery of both oxide and sulphide mineralisation at Cheyeza East, its potential for a Tier 1 copper deposit, and comparisons to major neighbouring mines. They also cover ARC’s joint venture with Anglo American, newly secured mining licenses, future exploration plans, and the company’s strong financial position.
Q1: Nick, these copper assays from Zambia just released, they look pretty interesting. Can you give us some background on them please?
A1: This marks a very big turning point for ARC Minerals and our shareholders. It’s a very significant result, 41 meters at 0.61% and importantly, with sulphide intervals the oxide zone.
Q2: What’s the significance of finding both oxide and sulphide mineralisation at Cheyeza East?
A2: Very significant. So, this is more exciting than what we’ve previously drilled at Cheyeza as ARC Minerals.
Investors will recall that we previously had remobilised copper oxide occurrences, and we were trying to find, obviously, the ultimate sulphide at source. Whereas now, this appears to be the result of weathering of the primary sulphide at source, so this is very, very significant for us.
Secondly, I guess the extent of the oxide zones alone could potentially be very significant. The distance between these two targets, the drilling that we did at ARC, and then this current assay is about one and a half kilometres apart. So, it’s a very significant area and so obviously a key target for us going forward.
Q3: How does the mineralisation depth and grades align with the expectations for a Tier 1 copper deposit?
A3: Anything above 0.5% is regarded as prospective and economic. If you look at our neighbours, they’re mining even below that, especially from what is near surface. Vassili, you’ve got a lot of experience with this part, but you might want to comment.
As you say, neighbours, even if you go further along to Lumwana, both Lumwana and Sentinel, they started off mining these sorts of grades when the copper price was half of where it is today. I think at present; they’re probably mining grades below these.
So, that’s the basis for our excitement and that we’ve got the thickness, and the grade is there as well.
Q4: Vassili, could you elaborate on the extent and implications of the sulphide mineralisation observed at Nkwazhi?
A4: At this stage, that intersection shows that the mineralising fluids were present in that part of the basin.
To remind everyone, Nkwazhi is about equidistance between Muswema and Cheyeza, roughly 10 kilometres from each, so if one takes an aerial view and looks down, you’re looking at quite a vast area where these fluids were present.
I’ve been moving around in the Cheyeza now to find the right structural setting with the reductants in place where these fluids could have pooled and formed a deposit of size and grade.
Q5: How do the sulphide intervals below the oxide zones at Cheyeza contribute to understanding the primary deposit structure?
A5: You’ve got the sulphide that has weathered to form the oxide, and we still have a little bit of sulphide remaining. So, having the sulphide zone a few meters below the weathering zone, where the oxides are located, supports this and this whole down dip from this hole should intersect the sulphides.
This is what everyone is looking for. If it’s there and if it’s the same thickness in that grade and we can then follow it along, strike and down dip, then you can quickly build up the tonnes and grade.
Q6: Just turning back to you, Nick, based on these assay results, could you speculate on the economic viability of Cheyeza East as a future mining site?
A6: It’s clearly too early because we’ve just started drilling there, but clearly an oxide resource with these grades is a viable operation, standalone. Obviously, if there’s a sulphide deposit as well, then this could potentially be huge. Kansanshi, one of our neighbours, started life I believe as an oxide and then morphed into a sulphide.
Vassili, you’ve got a lot of insight into First Quantum’s operations next to us?
Yes, obviously when exploring, you’re looking for these deposits, if they’re at surface, you’ll find the weathered footprint of that deposit. That’s why, as Nick said, all these deposits would have been initially picked up as oxide deposits and it’s only when you start drilling down, do you pick up the sulphide. The sulphide is obviously where you get all the tonnes and grades, and you get these billion tonne resources.
So, the fact now that at Cheyeza, we had the remobilised oxide and we think now that they’ve found the primary source of that, we could be on to something here.
Q7: Nick, how do these findings at Cheyeza compare to other copper discoveries in Zambia, particularly in terms of grade, depth, and potential scale, for example, with Sentinel?
A7: It’s a very good question and I’ll let Vasili touch on this because he was active at the time in that part of the world.
As I said earlier, anything over 0.5% is considered economically attractive. Some of our drilling at Cheyeza previously as ARC, Hole 004 that investors will be familiar with, that had 18 meters at 2.35%, that is high grade, and that’s again from near surface. So, we’re in an amazing area, it’s without doubt, one of the most, if not the most prospective copper area in the world.
You mentioned Sentinel, if you look at what I believe they initially found, I think they were similar thicknesses and grades. Vassili, you’ve probably looked at that data?
Yes, 40 meters is in the right ballpark and if we can continue getting those thicknesses with those sorts of grades and even thicker, then you can build up those tonnes. So, it’s obviously still early to start making comparisons to our neighbours but this is the first hole, it’s a discovery and it’ll be interesting to see what comes out over the next the next programme.
Q8: Nick, are there plans to extend exploration beyond the Cheyeza and Nkwazhi targets, given the large tenement area?
A8: The short answer is yes; we’re spoiled for choice. We’ve barely scratched the surface here with our drill programme and targets, we’ve really just started. We were late to start our drilling last year for various reasons with our joint venture partner, Anglo American. Everything has settled down there and we’re looking and working now during the rainy season at our future targets and so on.
If you look at the map, you’ll see the whole tenement area and you’ll see Fwiji, Nyambwezu, Lumbeta, these are targets that we haven’t even started drilling properly as the JV. So, we are really are spoiled for choice, a huge amount that that that’s left. This is 767 square kilometres, a massive area.
So, yes, we’ve got a lot of work to do going forward.
Q9: Nick, could you speculate on Anglo American’s larger plans for Zambia going forward?
A9: It’s not really my role; it would be inappropriate for me to comment.
My understanding and certainly all our discussions with our partners at Anglo is that they are very interested in Zambia, as is frankly every other major mining company that’s interested in copper. We read the press reports that Anglo’s CEO met the President of Zambia last year so there’s no doubt that our joint venture is a very high priority target for Anglo, I think it ranks within their top three exploration targets.
Q10: Just turning to some of the corporate matters pertaining to ARC Minerals. Nick, what’s the significance of the interim injunction for protecting our minerals existing and future interest in Zambia? How does it impact the Anglo JV?
A10: It’s very significant, so it stops any interference in any of our joint venture license areas. This was a major development for us, we will not put up with bad actors trying to interfere, you get this, it’s like bees to honey when you’re sitting on something as lucrative and attractive as we have. So, we simply aren’t going to tolerate any of this nonsense.
This protects all of our interests, all of our operations, all of our future operations and targets for both ARC and the joint venture with Anglo, so it’s a great outcome. I’ve always said that the rule of law in Zambia is something that makes Zambia a safe place to invest and this really underscores that.
Q11: What’s the significance of the approval of the large-scale mining license for the Anglo JV and ARC broader exploration strategy?
A11: I’m not sure the markets really understood some of the significance of this. It is very significant. This LML 33404 has been approved as a LML rather than an application, that’s clearly very significant.
We obviously need to complete our drilling and remind people that Cheyeza is located in that LML, and we need to do the further drilling, obviously, ultimately define a resource and complete the remaining work, whether it’s environmental mining plans and so on.
This is clearly, in terms of the way it works in Zambia, in terms of the LMLs, an award of LML, it’s a first step towards a potential mine. I’m not saying there is a mine, there will be a mine, but there’s a lot more work to do but it’s a very, very important first step for us.
Q12: What are the next steps following the reinstatement of the other two mining license applications?
A12: We’ll be drilling those other two and then we’ll be like previously in the one that’s been granted, we will obviously then potentially produce our further work that’s needed, whether it’s environmental and mining and so on.
Vassili, do you want to touch on the other two and what we see there?
Yes, before the onset of the rainy season, Anglo American did want to do some work on one of those licenses, but they felt that it was a bit tight in terms of access because one of the locations was quite remote. So, it’s definitely having those mining license applications reinstated clears the way to go back in there and do further work and develop those licenses.
Q13: How does securing these licenses enhance ARC Minerals position in Zambia and impact future drilling and development plans?
A13: It’s absolutely a major endorsement, ultimately by the Ministry of Mines in terms of the joint venture. It significantly de-risks the investment proposition, of course, we now have one, and we have two of the other applications for LMLs granted.
So, just to remind investors, we have an enviable footprint here. You can see from the map, absolutely massive area, huge number of exciting targets. We have an excellent joint venture partner in the form of Anglo American who have a huge amount of experience and firepower to really see what we can exploit here.
We’ve got, as I said earlier, a very strong legal position now. We’ve got very strong government backing and I repeatedly have thanked the government of Zambia and its various arms for the support they’ve given and continue to give us.
We now really have everything ahead of us in terms of targeting and developing these multiple targets that we have. This is one of the most prospective copper regions in the world, this is the equivalent of the California gold rush, if you like, and, we’re right there, centre stage.
So, hugely exciting time for all of our shareholders.
Q14: Finally, could you just briefly touch on the group’s financial position and any efforts to gain institutional interest?
A14: Our financial position is strong, I’ve mentioned that many times, there are absolutely no plans for a raise. We’re good into ‘25 and into ’26 and so no concerns there.
We are trying to elicit further interest from institutions. Vassili and I have a number of meetings, we’ve had a number of requests for meetings, and we’ll be meeting those.
As we develop this joint venture and hopefully discover something really, really of size, that will attract the institutions as the market capitalisation of our company grows.
So, we’re certainly working on all of that.
