Thanks for taking the time to do the sums. Possibly the best indication of AXM's future I have ever read. This really shouldn't have to be done by the shareholders who need to rely upon assumptions make sense of the sums. Obviously there is a transparency issue.
As with many stocks, AXM are keen to report good news but very sheepish when it comes to bad news. This leads to allegations of insider trading, manipulation and rumors aplenty, which usually serves to beat the share price down even further. Better to clarify rumors straight up than wait for rumors to dwindle your share price away then belt down the share price by confirming negative rumors.
July's gold production was far below expectations and should have been reported in a regular monthly production update. A brief description of the problems and a statement explaining that the problems are being worked through is all that was needed. Instead, Apex chose not to disclose this info simply because it was bad news.
With AXM, no news = bad news. If you don't know what's happening in Wiluna and management aren't happy to tell you, get out of the stock.
The share price will only improve once a positive cash flow, without the need for further share placements, has been proven. ROM stocks are being depleted faster than expected hence other ore bodies will need to come online sooner, whilst at the same time maintaining current production. The extra cash needed to develop the new ore bodies isn't going to come from current production levels and rock isn't going to magically appear on the ROM pad. As suggested by the article in the West Australian on 25/8/09, it looks like AXM will need to do yet another share placement.
In my opinion, holders will be waiting a while for this to turn around while being exposed to further development risks.
Good Luck!
AXM Price at posting:
6.9¢ Sentiment: ST Sell Disclosure: Not Held
