re: Ann: AXIOM MINING SOLOMON ISLANDS HIGH CO...
Hi guys, found this on the highgrade website... Highgrade.net
Axiom courts key outcome Paul Garvey in Hong Kong, 18 August 2011 SINCE Axiom managing director Ryan Mount last met with HighGrade in Hong Kong a few months back, he appears to have had a hard time convincing investors that the tenure over Axiom?s potentially huge Isabel nickel laterite project is sound. With a court case set to start in the Solomon Islands this week, Mount is hopeful the legal challenge may finally put an end to its fight with Japanese giant Sumitomo and provide the certainty of tenure that the market has been waiting for.
Catching up in Hong Kong with HighGrade recently, Mount seemed to be looking forward to his day in court.
Axiom announced earlier this year that it had picked up the Isabel deposits through a series of agreements with local landowners, who under Solomon Islands law have the final and ultimate say over who explores and mines their land. The move was a shock to Sumitomo, which believed it had the rights to the deposit. While Sumitomo had claimed the project for a decade, it had made little to no progress due in part to the country?s complicated landholder-driven system.
There have been a lot of accusations about the validity or otherwise of Axiom?s claim since then, and the court case is the culmination of Sumitomo?s angst over the developments at Isabel.
Sumitomo is suing not just Axiom but a number of landholders and members of the Solomon Islands government itself. As a general rule, taking the government to court in what is to put it mildly a developing nation would not appear to be a preferred course of action, so the legal case would seem to have a whiff of desperation around it.
If Axiom?s claims to Isabel are as watertight as Mount claims they are, then the case should be a quick one.
Resolving the impasse once and for all is critical for Axiom. The company?s share price has drifted from a high of A8c a share in April back to 5c, with investors clearly anxious about Axiom?s rights to Isabel. Despite the uncertainty Axiom managed to recently bring in $A1.5 million through a private placement. Another $5 million has been lined up in the form of a convertible note with a global fund pending due diligence, with the court case no doubt a key element of the investor?s concerns.
Three drill rigs on site ready to go, and the technical team from Xstrata?s Freida River mine in Papua New Guinea ready to oversee the work. An injunction from Sumitoma means Axiom is not able to carry out any exploration for three months pending the result of the trial, something the company agreed to while Mount was out of the country and unreachable.
If and when Axiom wins clearance to begin drilling, it will be chasing what would seem a pretty significant orebody.
Inco, which first explored the project decades ago, only drilled to 5m depth in pulling together a non-JORC compliant resource of 160 million tonnes of ore grading 1% nickel and 0.07% cobalt.
Mount?s key priority post-legal challenge will be to replicate those numbers to contemporary standards and test just how deeply the body extends.
The deposit?s proximity to surface and its position next to a natural deepwater port ? actually named Thousand Ship Bay and a former home to the Japanese naval fleet during the occupation of World War II ? means the project could be in some form of production relatively quickly.
Of course, all that assumes Axiom gets the result it is after in court.
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Nick
AVQ Price at posting:
4.5¢ Sentiment: Buy Disclosure: Held
