ARX has been trounced lately, though not much of the blame can be apportioned to general market conditions - rather, it was the general civil unrest in Indonesia that had caused them strife.
The company was in the midst of a highly successful drilling campaign when the nation was swept up in protests that severely curtailed investment and development. Companies such as Intrepid saw their rigs destroyed, and as a preventative measure, ARC exploration suspended their activities in the region. In the interim they have pursued the Trenggalek project, for which the results have been disappointing (as evidenced by the share price).
In the most recent quarterly report, the company announced that it has undertaken extensive discussions with local interests (local govt., police, farmers, residents, etc.) regarding the viability of an exploration program in the area. This report also indicates that the discussions went well.
Were trenching and geochemical analysis to recommence, a continuation of the previously reported grades seems highly likely:
- 86m @ 2.78g/t Au - 3m @ 64.0g/t Au - 22m @ 2.15g/t Au - 12m @ 3.44g/t Au - 12m @ 24.8g/t Au - 38m @ 1.41g/t Au and 41g/t Ag - 11m @ 1.22g/t Au and 14g/t Ag and 258,000g/t Ba
These are trenching samples from an epithermal Au system that overlies a prospective Cu-Au porphyry system. When these results were being delivered, the share price was up around 3c to 5c. It is 1.6c as of today. The market capitalisation is $13.2 million at 825 million FPOs (options are out of the money) plus some dilution to account for a US $1.3 million unsecured convertible loan (repayment 03/12 at 50:50 FPOs:Cash or 100% FPOs at 25% discount to 30 day VWAP).
If, as the company notes, trenching and sampling can recommence at Bima with the endorsement of local communities, I would envisage a decent level of upside from the current prices.
The grades they have intersected are simply excellent, and are from surface. That they may overlie a major copper porphyry (as do several of their neighbors) certainly adds another element of interest too.
I reckon this month will see the bottom is coming in for this trend, and have started accumulating accordingly. Their JV with Anglo American is Cu-Au elephant country, so news doesn't need necessarily come from the one project, either.
Put simply, it seems one could presently buy exposure to Bima at deflated prices whilst the company prepares for the next round of exploration.
Cheers
Tawny
ARX Price at posting:
1.6¢ Sentiment: Buy Disclosure: Held
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