Hi Goarmy
I'd tend to agree buying at 3.3 cents is probably too much right now for where they're at.
I would think that there is plenty of potential upside at below 2 cents - with 150 million shares on issue, 2 cents rates the company resource at about $2.50 inground (including probable and inferred resources) just at the mine.
Tough position right now, but if they can survive the shares will definitely be worth more than now!
If they can offload the debt, they become an explorer again and will most likely get some cash flow through being paid to finish the JORC job at the mine.
If they survive, worst case they have 0% of the mine, zero debt and just about zero dollars. They would likely need to do a capital raising.
Their other sites are not any worse than Excalibur's Tenant Creek - EXM has a market cap of over $9M whilst Arc is sitting below $3M.
If you add in a percentage of a near term active gold mine, the price target becomes a lot more attractive.
So - potential prices:
No deal - $0.000
Sell the farm (no % left of the mine) - $0.05+
Minimal residual (5%) - $0.10+
Decent residual (10%+) - $0.20+
As said though there is a very real risk of a deal not going through. The gold is there, but the site has been plagued by problems (although they should largely be behind it now) and the ANZ debt is a big issue.
The current economic conditions mean that cash is king.
Very soon gold will be too - will Arc get a deal before this happens though?
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