Arkle Resources are a small MCAP business with gold and zinc interests in Ireland (see here).
The share price has increased significantly over the last few weeks despite a placing and the issuing of options. The trading volumes have been exceptionally high.
Placing was not offered to public and oversubscribed. What do those who took part know that we don’t?
Placing was completed in a couple of hours, therefore no time for due diligence.
On same day after placing announced some big buys at higher price than the placing price. Was this some buying who couldn’t get the allocation of the placing they wanted?
So why the sudden interest in Arkle Resources, what’s going on?
1. Options issued now for a reason. BOD ensuring they benefit from impending uplift? Why would you announce options directly after a placing?
2. Several interested parties in Stonepark asset. Listen to the interview with Arkle (here).
3. Business can’t say more as 1 or more NDA’s in place?
4. Group Eleven have stated they will recommence operations at Stonepark in August. Puts a timeframe on any negotiations as you would want to conclude before more positive data available.
5. Secured funding shows Arkle will not take a lowball offer as have access to funds to continue alone.
6. Huge volume last few days – share has traction
7. Expecting a TR1 because of the volumes – will it be Glencore?
8. Look at the gold assets – market hasn’t focused on these yet. Have funding. How much more funding will Arkle have to maximise asset value if/when Stonepark deal materialises?
Arkle share price moving up is no surprise. In the interview clearly wanted to say more but couldn’t as information not in the public domain.
What was point of interview? In my opinion to make it clear to interested parties they have competition. Only way of doing that, if NDA’s in place, say nothing but make it clear want to say more.
Glencore have invested in Group Eleven who own the lions share of StonePark. The prospect has higher zinc levels, at a shallower depth than Glencore’s adjacent licence area.
It is not surprising that Glencore have shown an interest.
Arkle are not a distressed seller. Arkle hold the ace cards and are currently a thorn in Glencore side as any upside from Glencore investment in StonePark, Arkle get as a free ride.
It would make business sense for Glencore to secure all upside for themselves.
We now have a First Equity issuing a buy recommendation pointing out the following:
1. Highly advantageous JV terms Arkle has in joint venture
2. Arkle has rights to sell percentage of any metal produced. This is an asset that can be sold on.
3. Zinc at shallower depth than Glencore area.
4. Significance of Glencore investment in Group Eleven.
You don’t have to be a rocket scientist to realise when you read the recommendation that belief is Glencore interest/action isn’t finished yet.
What will happen in the next few weeks?
- Glencore make an offer for Arkle zinc interests?
- Another bidder materialises?
- TR1 issued?
This share is poised for some serious upward share price movement.