Arc Minerals : Proposed Placing and Acquisition

Arc Minerals Limited - Proposed Placing and Acquisition

3/24/2021

RNS Number : 3027T

Arc Minerals Limited 24 March 2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION.

UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN ARE RESTRICTED AND ARE NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR A SOLICITATION OF OFFERS TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL, INCLUDING THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY SUCH OFFER, SOLICITATION OR COMMITMENT WHATSOEVER IN ANY SUCH JURISDICTION.

THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN IN THE APPENDIX.

THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED. RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.

24 March 2021

Arc Minerals Ltd

('Arc' or the 'Company')

Proposed Placing

Acquisi�on of Prospec�ve Kalahari Copperbelt Licences

New Drilling Campaign

Arc Minerals Ltd ("Arc" or "the Company") is pleased to announce a fundraising of approximately £1.5m to fund further drilling ac�vi�es over the coming months, principally an ambi�ous new deep drilling programme at the Cheyeza and Muswema targets. In addi�on, the Company announces the inten�on to acquire a new project in the Kalahari Copper Belt, an area of high strategic interest.

Proposed Placing

The Company is carrying out a fundraising to raise approximately £1.5 million, before expenses, by way of a placing of approximately 23million new ordinary shares of Arc ("Placing Shares") at a price of 6.5p each (the "Placing Price") (the "Placing"). WH Ireland Limited is ac�ng as broker in rela�on to the Placing (the "Broker") and a placing agreement has been entered into today between the Company and the Broker in connec�on with the Placing (the "Placing Agreement").

The Placing is being conducted, subject to the sa�sfac�on of certain condi�ons set out in the Appendix to this Announcement, through an accelerated book-build process (the "Bookbuild"), which will be launched immediately following this announcement.

Expected Use of Proceeds for Ambi�ous Drilling Programme

Explora�on ac�vi�es over the last couple of years have targeted the surface anomalies iden�fied primarily from the soil sampling programmes with subsequentshallow drilling providing a be�er understanding of the mineralisa�on within the Company's license areas. As a result of further follow-up analy�cal work it is now believed that a number of targets are host to a series of deeper mineralised systems. A fixed-wing airborne magne�c and radiometric geophysical survey with �ghter spaced (50m) flight lines over certain target areas is being planned. This high quality survey will provide a detailed subsurface picture over the areas in ques�on that will enable targeted follow-up deeper drilling to confirm the interpreted basin architecture and target poten�al mineralising traps and structures at depth.

In addi�on to the deep drilling programme planned, the placing proceeds will also be used for working capital purposes;to progress work at the proposed acquisi�on sites if the acquisi�on set out below completes; and may be applied to increase the Company's stake in the Company's Zamsort asset, subject to nego�a�ons and commercial agreement.

Proposed Acquisi�on

The Company has signed a binding term sheet for the acquisi�on of 75% of Alvis Crest (Proprietary) Limited ("Alvis") which holds two prospec�ng licenses in the Botswana Kalahari Copperbelt, adjacent to the world-class high grade copper-silver project Zone 5, owned by Khoemacau Copper Mining ("Licenses").

Alvis is a wholly-owned subsidiary of Kopore Metals Ltd ("Kopore"). Pursuant to the term sheet, and condi�onal on ma�ers including due diligence, regulatory approvals and documenta�on, Arc will acquire 75% of the issued ordinary shares of Alvis, a company incorporated in Botswana for a considera�on of £1.2m to be sa�sfied by the issuance of new ordinary shares of Arc, based on the 10-day VWAP prior to comple�on of a binding Sales and Purchase Agreement ("SPA"). Arc will have an op�on to acquire the remaining 25% of Alvis for US$5m (exercisable un�l Arc makes a final investment decision, which would be upon the comple�on of a bankable feasibility study in respect of the Licences). The acquisi�on of Alvis is condi�onal on the sa�sfactory comple�on of due diligence and the transac�on comple�ng, Arc is commi�ed to spending US$200,000 per annum on the prospects and would be required to procure that Alvis pays a 1% net smelter royalty, capped at US$30m to Kopore. The royalty can be bought out at a cost of US$5m un�l Arc makes a final investment decision. Further updates will be provided in due course and the Directors believe that the condi�ons could be sa�sfied within the next few weeks.

The acquisi�on will be subject to the Company comple�ng due diligence and the entry into defini�ve legally binding documents. There can be no guarantee that the acquisi�on of Alvis will be completed.

The Licenses, covering over 210km2, are approximately 10km south east of the large underground Zone 5 project, where the 60kt Cu and 2Moz of Ag produc�on per annum is due to ramp up in the second half of 2021. See picture below/a�ached.

h�p://www.rns-pdf.londonstockexchange.com/rns/3027T_1-2021-3-24.pdf

Figure 1. Image showing explora�on licenses PL 135/2017 & PL 162/2017 ('Virgo Prospects') in the Kalahari Copper Belt and the known deposits discovered to date. (Source: Slide 8, Kopore Metals Presenta�on March 2021)

These explora�on Licenses have extensive geochemical and geophysical data and have walk-up drill-ready targets.

Nick von Schirnding, Execu�ve Chairman of Arc Minerals stated:

"This is a very exci�ng �me for Arc as we recommence our drilling programme once the rains dissipate over the next few weeks. Following a detailed work programme over the past few months we now believe a number of targets within our tenements are host to a series of deeper mineralised systems. This will require more significant, deeper drilling as well as an airborne geophysical survey. Notwithstanding the ongoing exclusivity discussions with Anglo American, which have been very produc�ve, we are simultaneously pursuing an aggressive and ambi�ous agenda ourselves.

The acquisi�on of Alvis represents an opportunity to acquire a very interes�ng asset with minimal dilu�on for Arc shareholders at a �me when there is a rush for a�rac�ve copper projects. I look forward to upda�ng shareholders on further progress."

Addi�onal Placing Details

The Placing is condi�onal, amongst other things, on Admission of the Placing Shares