hi 1bacchus,they are just my thoughts. i dont hold, and never...

hi 1bacchus,

they are just my thoughts.

i dont hold, and never have. but i have been watching this one out of curiosity - mainly because it was recommended by a (second rate, admittedly) subscription service back at 45c or so. i still cant help but think they sold into that advice. anyway.. i digress.

to balance my post, i should add since it is illiquid, it "has potential" to move up pretty quickly. and i tend to like illiquid shares, because they offer more upside. and i suspect this is why you like it, as well as its "low" market cap.

but what i cannot see now is the catalyst for a re-rating. i'm sure you've had a look at the most recent cashflow report (as at 30 sep 09), only $11,000 spent on exploration, $162,000 on administration, offset by $74,962 in interest received. that interest received will be reduced going forward since they have $1.7m less cash on hand which was spent on the pantheon shares.

the market cap of AXT is 82,800,000 x 6.5c = $5.38m

the asset backing is:

4,045,709 cash (less say $145,709 for the last quarter) = 3,900,000 - $1,700,000 paid for pantheon = $2,200,000 cash on hand

7,000,000 pantheon shares x 20 "pence" = $1.4m pounds / .56 exchange rate = $2,500,000 (they paid $1.7m).

= asset backing of $4.7m = 5.67cps

so asset backing has increased by $800,000 due to the pantheon shares, but unless they sell those shares, it doesn't make a difference to their cash position and need to raise cash to drill for IOCG deposits.

now for every "pence" that pantheon increases, the asset backing of AXT rises by 7,000,000 x 1p = 70,000 pounds = $125,000 = 0.0015cps. so if pantheon shares DOUBLED (could they even?) and went from 20p which is it currently to 40p, then AXT would be worth another $2.5m = asset backing of $7.2m / 82,800,000 shares = 8.7cps.

i'd say this share is a HOLD currently if you have them, but NOT a buy. if it was a buy i wouldn't post all my calculations until i was set. this would be a buy FOR ME around their cash backing (2.6c) + 1c per share for the pantheon shares, which would be 3.6c cents. we would likely see that level in a sharemarket smackdown (AXT has been lower than that before, and spent a lot of time (feb-sep 09) down there earlier this year).

cheers