SMALL CAP IDEA: Could Arc Minerals  emulate Greatland’s success?

Greatland Gold has shown it is possible for a mine developer to chart a route from the ranks of the microcaps to jackpot-style success as a producer.

Right now, it is valued at over £1.4billion. And in time, one imagines, it will vault into the ranks of the blue-chips — certainly if it realises the full potential of its elephantine discovery in Western Australia.

Hoping to emulate this success is a company that has so far flown below the radar…but for how long?

Arc Minerals appears to have all the building blocks in place: assets, geology (and ‘nearology’), management, and funding.

Crucially, it also has a partnership with one of the world’s mining majors – a deal that, on paper, is worth multiples of its current market value.

Rather than gold, Arc is focused on what is probably the second-hottest area in mining at the moment: copper.

The red metal is the cornerstone of energy transition technologies, playing a key role in renewable energy and electric vehicles — alongside its traditional uses in wiring, plumbing and construction.

Analysts also note that the rise of data centres supporting artificial intelligence (the so-called fourth industrial revolution) will give demand, and prices, a further kick.

Strategic updates from the global miners show they are doubling down on copper, in both production and exploration. The likes of Anglo American, BHP and Rio Tinto typically take a 30-year view on investment – and bet big.

So it is against this backdrop that Arc’s prospects should be viewed.

Under chairman Nick von Schirnding, a former senior executive at Anglo and De Beers, and chief operating officer Vassilios Carellas, it has compiled an impressive portfolio of assets in Zambia and Botswana.

The jewel in the crown is a joint venture with Anglo American, worth $14.5million in staged payments to Arc, along with a commitment to spend $74million developing the licences pieced together by the AIM-listed junior.

For that it can earn up to 70 per cent of the project, which covers approximately 767km² in Zambia’s North Western Province, within the renowned copperbelt.

The area is home to world-class operations such as First Quantum Minerals’ Sentinel and Kansanshi mines, and Barrick’s Lumwana mine.

Anglo has ‘previous’ in the region having withdrawn from its principal Zambia asset, Konkola Copper Mines, in 2002, citing a slump in copper prices and the project’s unprofitability.

Arc’s licences sit in the Mwinilunga district, within the trending arm of the major geological structure known as the Lufilian Arc, on the western flank of the Kabompo Dome.

This region represents one of the last dome-related areas in Zambia yet to be explored in detail.

Recent drilling has returned promising copper grades. Hole KCDD002 hit 40.6 metres at 0.61 per cent copper from a depth of 22.25 metres, including a higher-grade section of 7.7 metres at 1.72 per cent copper, and another stretch of 12.75 metres at 1.20 per cent.

The find, 1.5km from the Cheyeza East deposit, confirms both near-surface oxide and deeper sulphide mineralisation.

Six holes have been completed so far across four targets, with the deepest reaching 977.4 metres. Sulphide copper has also been intersected at the Nkwazhi prospect.

Paul Smith, analyst at Zeus Capital, described the drill data as ‘impressive’, noting ‘significant high-grade copper’ and adding that the mineralisation could be considered mineable. ‘This is an early stage of an intensive copper exploration strategy and we are encouraged today by the results,’ he wrote in a research note.

Moving to Botswana, Arc’s Virgo project sits in the thick of it. Tucked into the Kalahari Copper Belt, the company’s licences lie just 10km from Khoemacau, a major underground mine recently brought online by Cupric Canyon and now snapped up by MMG in a $1.9billion deal.

It’s a compelling bit of real estate. Arc holds a 75 per cent stake in Alvis-Crest, which controls two exploration licences covering more than 210 square kilometres in a copper belt drawing growing attention.

The ground sits inside and alongside what’s known as the Central Structural Corridor, a geologically promising zone within shouting distance of both the Zone 5 and Banana Zone deposits, the biggest copper finds in the region.

What’s more, Arc’s key licence is almost encircled by ground held by Khoemacau, where recent discoveries have hit copper at mineable grades. One target, the Mawana Fold, lies to the north-west. Another, the Zone 9 prospect, sits to the south-east. Arc’s land lies between the two, in what appears to be the right geological neighbourhood.

Back in Zambia, Arc has added another piece to its portfolio by picking up the Chingola Project in the heart of the copperbelt.

The newly acquired licence covers more than 300 square kilometres in a region with serious pedigree — nearby mines such as Nkana and Mufulira helped put Zambia on the copper map.

What makes the ground interesting is its geology. The licence wraps around two dome structures, Katembula and Chisangwa, both rimmed by copper-bearing rock formations.

The area also hosts deep-rooted fault lines and a folded basin structure, or syncline, a shape often associated with copper deposits in the region.

Arc is buying the project from local outfit Brxton Construction via its Zambian subsidiary.

The deal is structured around staged payments – $50,000 up front in cash, followed by further share and cash instalments tied to exploration milestones, including drilling and resource definition. There is also a 2 per cent royalty agreement, should the project reach production.

It’s a modest outlay for ground that adds scale and optionality to Arc’s exploration story and sits squarely in the shadow of some of Zambia’s most productive copper mines.

We touched earlier on the experience brought by chairman Nick von Schirnding, a former senior mining executive, and chief operating officer Vassilios Carellas, a geologist by trade who, unlike many of his peers, combines technical skill with genuine commercial nous.

That quality runs through Arc’s board and senior management, suggesting the company has both the expertise and bandwidth to become a much bigger business. It is a team with a strong track record in the sector.

On the financing front, the joint venture with Anglo means investors aren’t facing the usual overhang of an imminent fundraising — a key point of difference from many of the juniors on AIM. The next payment from the deal — $1 million — is expected in the fourth quarter.

It’s also worth noting that the Anglo investment values the Zambian assets alone at £97million ($125million). Compare that with the company’s current market capitalisation – just under £25million – and you can see there’s a disconnect.

That’s more a reflection of the sclerotic state of the small-cap market in the UK than of Arc’s prospects as it continues its corporate journey in 2025, with more drilling and exploration results to come.

Now, after all that praise, a few cautionary notes. Readers should always do their own due diligence. I can only tell the story as it’s been laid out. Deeper digging is always advised.

Arc is not a one-way bet. Exploration is a tricky business, and events, particularly political ones, can always overtake even the best laid plans.

While both Zambia and Botswana rank among the more stable countries in Africa, the events on the world stage over the last three years reveal instability can emerge from any source, undermining stock valuations.

That said, Arc has all the ingredients to be a winner — and it’s certainly one for the watch list.

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