what a dog of a company, page-47

Hi asf
"Fundamentals *could* change if this is a successful turnaround story, although those are notoriously difficult. it does seem, though, that this company has been taken in hand, and by people of some repute. This company has been a basket case, and hit crisis point- that's now. Can the new mob sort it, or is it fundamentally broken in its model and cannot be resolved?"

In my opinion its hard to put a "positive spin" on this company which is fundamentally bad news and bad management and greed. A difficult underground operation and a difficult treatment route but may be profitable sometime in the future. I generally try to live in the present, not reflect on what was done badly in the past or what might be done better in the future. However... AXM has never delivered on turnaround stories. You say "This company has been a basket case, and hit crisis point- that's now." I agree to take current position as a starting point.

"Fundamentals *could* change if this is a successful turnaround story"

Turnaround was going to be done by Apex (Glenn Jardine Grant Brock Mike Walsh and Mark Ashley and co) then by Rod Jacobs, then by Allan King, then by Mark Ashley all by himself. Some of these guys were very capable. If they couldn't do it, I doubt if the next guy can.

"it does seem, though, that this company has been taken in hand, and by people of some repute".

There have been plenty of qualified and experienced people working at Wiluna. Mine sites are complicated and even if lots of good people leave they still keep operating. The problem was not the people (good/bad) but the cash flow. The best plant operator can't run the plant if you run out of cyanide/lime/ flocculant. Same with your best underground operator with no anfo/bogger/diesel. The cash flow has been the problem. They are not making a profit! Has anyone noticed this? Why is the ASX allowing them to trade while probably insolvent, not paying wages, not paying suppliers, etc. Raising a rights issue for the future good news, or selling off the assets, should not hide the fundamentals which is cash costs are greater than price of gold. Does anyone else remember the "surprise" of the GUPS buy back, did we even know that MA had sold the Gold Upside Potential to someone else and had to buy it back, I don't remember him explaining that bit of financial engineering to the ASX shareholders at the time. We thought we were shareholders going for a ride with the gold price.

"As for me, I have taken a risk that the only way this turnaround story has a chance of having a beginning, is if the rights issue has some success."

If you have taken a risk does that mean you bought some shares? Good on you, if you buy at 2 cents and sell at 3 cents, thats a great outcome for you (but high risk).

"Whether this is the worst gamble on the ASX is another question."

Good word, "gamble", have a go but keep your exposure to play around money of 10% of your portfolio (if not too late). AXM is a proven heartbreaker of a company.