Fundamentals are driving the stock price now. Traders have been...

Fundamentals are driving the stock price now. Traders have been calling the bottom ever since the dizzying heights of 40 cents.

The next few months will make or break AXM. With such a huge question mark over the viability of the project without further capitol investment, it will take more than just a funny angle on a squiggly line to turn this into a good trade. Charts are great tools for making money by trading solid stocks with a proven positive cash flow and minor debt. I wouldn't rely too much on the chart for stocks that should be considered highly speculative.

Potential downside:
1. Wiluna fails to produce enough positive cash flow to bring online ore bodies necessary to continue production. (Capitol injection required)
2. Share placement.
3. After a track record of failing to achieve targets, current investors would be unlikely to support another cap raising.
4. Failed cap raising results in the company being insolvent.
5. Price of gold - AXM is hedged hence not so susceptible to POG fluctuations. Are we at the peak of a gold bubble?
5. The chart???

On the plus side:
1. Underground mining has a bumper 6 months and ROM stockpiles don't run-out.
2. Production improves recovery and produces a consistent 10,000+ ounces per month over the coming months.
3. Big player comes in and buys a chunk of Apex. Shareholders get a premium for their shares and or the extra cash is enough to turn this into the money maker it could have been.
4. Another miner without a plant pays Apex to treat ore for them whilst Apex underground mining catches up.
5. Price of gold - A high POG could support any cap raising / buy out.
6. The chart???

Even if September production is great and AXM pour 12000 ounces, the Sept quarter will be dismal. I don't expect a major re-rating without 2 quarters of positive cash flow without cap raising. You might get little upswings, just like the little ball on the roulette wheel at the casino might land on black.

Insolvency is a real possibility, but I think unlikely. Think twice about buying in. It might look as though the only way left to go is up but there is a lot of hurdles to be worked through first.