My optimistic reading of AXE and its strategy is that early on the company identified that graphite mining is not the same as mining of bulk materials or base metals. It is all about processing and metallurgy.
The deposit itself even though only lightly drilled already has resources to justify a 15-20 year operation (and now with MOX land much more). Archer management identified this and decided not to waste money on drilling. Normally an exploration company would keep drilling and keep proving up resources.
What this has meant is that Archer's share price has struggled compared to its peers who are putting out drill results etc into a hysteric market for graphite stocks. I think TLG mentioned something in its announcement this morning about how they need to move on to a pilot plant and bulk material testing, Archer were well ahead in that regard.
There aren't many who have been doing as much work as AXE on the processing side of things though. We are now at the pointy end where hopefully management can show that its processing-centric strategy was the correct one (ie off-take deals are more readily available to the company).
I still have my doubts that the strategy has been as methodical and timely as the above would imply. Investors in this space really don't have a good handle on who is going to make it to market yet (aside from SYR). I think this is mainly due to the limited technical understanding among the early stage investors.
Another point of interest is that of the 84 million shares on issue, 20-30M+ are tightly held, mainly by the board. Always a good sign.
AXE Price at posting:
21.0¢ Sentiment: Hold Disclosure: Held
(20min delay)