Happy New year !
It seems like most here have got themselves into a real bother, from what I can read over recent posts– glad I do not read this forum regularly or else I’d be putting a razor-blade to my wrists !
As a shareholder now for over five years, I can understand I lot of the rhetoric however there are some many factual in accuracies on this forum and as to why these individuals are hell bent pushing such rubbish surely raises far more questions about their intent !
This reminds me of the fake news in the US elections (however we can’t blame the Russians because Gunvor are actually our partners !)
So, recently a few fellow shareholders and others have told me that the San Jorge deposit is not economic, the drill results are no good and prior to this, there were complaints of lack of announcements from drilling etc.
How can one come to this conclusion, that is, that San Jorge is not economic ? Has Axiom not been reporting efficiently on their drilling?
Speaking to the company I tend to get a very different view.
So let’s look at the facts:
i) There has been three drilling announcements in November & December over a 20 to 30 day period with each announcement having a decent intersection at 2% or higher.
ii) In these three announcements the company has used words like “expanding the mining potential of this deposit”, “progress the tenement towards mining”, “economic grades” and “provide a premium product to the nickel ore market in 2017”
Why is anyone questioning these statements?
Let’s have a look at Axiom’s technical team: the Executive General Manager was the former CEO of a UKK listed nickel laterite miner in Philippines and he was later COO for European Nickel in Philippines; Axiom’s technical advisor is the world renown Professor David Dresiginer and inventor/founder of a leading nickel processing technology; their Competent Person (ASX requirement for all mining companies to have a qualified person to sign off on all technical announcements) is John Horton who is a nickel laterite expert, including having 10 years at Golders Associates – you will see his name in the fine print at the bottom of each announcement; we saw earlier this year their mining consultants are IMC who are (I am told) the foremost leaders in tropical laterites in Australia; and Non-Executive Director, Jeremy Gray, whom is the former Head of Mining Research at both Morgan Stanley and Credit Suisse and now runs a resource investment fund.
Now, even putting all the compliance of public companies, directors, ASX, AusIMM etc aside, do you honestly think any of these professionals is going to bend the rules, ‘cook-the-books’, lie for Axiom? They are all established and/or have other directorships and/or many other clients (and of course their reputation) – why are they going to risk all this to lie to you and me?!
So let me now re-quote the company’s recent announcements as to the San Jorge deposit (of which most of not all of all of the above individuals would have had to specifically sign off on) : “expanding the mining potential of this deposit”, “progress the tenement towards mining”, “economic grades” and “provide a premium product to the nickel ore market in 2017”
iii) These three announcements have reported on 35 drill holes
iv) When Axiom first started drilling at Kolosori in November ’14 they had one announcement reporting on only 4 drill holes in Dec’14 with the next drilling update occurring in Mar’15 with it only reporting on a further 6 holes and another announcement in April’15 reporting on just another 8 drill holes….
Starting at a new project site is very difficult in a third world country and made more difficult in an island nation. Getting new local staff trained, camp’s established, logistics, permits for smaller operational matters all takes extra time at the start-up phase. But if we compare (iii) and (iv), as above, it looks to me Axiom is somewhat more efficient in the commencement of San Jorge than that of Kolosori (of which I would expect).
Most of us will recall then what happened during the development of the Kolosori deposit: after those initial few months there was then an acceleration of milestone achievements – drilling announcements were more regular and will more assays in each announcement, there was a JORC, a strategic shareholder – Anitua – took a 5% stake paying a 60% premium for a 5% stake, the San Jorge licence was issued, a nickel fund – InCor – took a 5% stake, the JORC resource was upgraded, there were Board and management appointments and an off take was put in place along with debt financing with a global major trading house – Gunvor.
So I think we can all agree Axiom has “form” (as we say in the horse racing industry) – it is proven performer once it gets on the ground and one I definitely wouldn’t take bets against.
Yes, a lot of what happened in 2015 was disturbed by the CoA decision but none of the key industry partners have left them such as InCor, Gunvor, Anitua – and these are the guys that do the real due diligence.
And prior to all of this they defeated one of the world’s largest mining companies is a massive four year legal battle just about all in the industry doubting they could defeat the might Sumitomo. Yes, the CoA decision was difficult in that we have to re-apply for Kolosori – BUT – 1) we retain San Jorge deposit; 2) we are free to re-apply Kolosori as there was no adverse findings against Axiom; and Sumitomo is now out of the way (with their tail between their legs!)
I have today seen some posts complaining about the financials including some whom obviously shouldn’t try to analysis and make public statements when they can’t read such a report. However, a few points:
- The CEO’s salary is what it is and it was voted on a year or so ago (The CEO invested 400k into the company this year)
- The money spent in the last financial year is nothing new, in fact it is old news: they issue quarterly cash flow statements to the ASX. Developing a world class deposit costs money and so does major high powered litigation.
- Emphasis of Matter as to a going concern – this has been in every audit report every issued by the company since I have been invested these past five years. It also on every other audit report of any other ASX listed company which doesn’t yet have sales – ie every Jnr explorer.
- As to Jazzmox claiming “off balance sheet debt” – there is NONE ! yes, the operating subsidiary may owe the parent company (us shareholders) money for funding the operation but that is not “off balance sheet debt” if anything it is the opposite ! (it is a credit owed to us – not a debt) Is the suggestion we as shareholders just write off the money loaned to fund the operating company ?!?! – thank god the company sacked you when they did !
And while I mention Jazzmox, your claims of bogus or poor a Pre-Feasibility Report seems to be very much off the mark. For those that were able to print it off in the week it was on the ASX site, and would see it was a fulsome report, produced by IMC and signed off by John Horton –two Australian leaders in nickel laterites. I found it very useful and informative. It was retracted because we didn’t have legal title to Kolosori – no other reason like you state.
I will also offer my first-hand experience ‘at the coal face’ of Axiom: For those that don’t know, I travelled to Solomons in 2013 with Axiom’s largest shareholder at the time. This shareholder formerly owned and managed an eight billion dollar hedge fund. In Honiara, Solomon Islands I had the pleasure of meeting the Prime Minister, the Mining Minister and landowners from Kolosori and San Jorge. I also spent time at Kolosori and San Jorge.
I can tell you that both the largest shareholder and I were of the view that no-one but Axiom will mine the project (due to strong government and on-the-ground relations) and that it is clearly a very difficult place to operate.
In my business I deal with natural disaster clean up and re-construction – Axiom is developing a world class project under conditions that constantly resemble a natural disaster zone in Australia ie no infrastructure, no electricity, no safe running water, no communication, lack of transport options and a number of arms of government no functioning well or if at all.
That all said, I know what it takes to build a business - I had faith in management (and still do), that they could overcome all these hurdles and build a mine. The billionaire investor also had that view and went one step further and committed to join the board for a year to support the CEO and his team’s effort. They no-doubt thought the case would not have taken so long (hedge funds think a 3 month investment is long term !). I have invested more since that original trip.
The things that have changed since my visit in 2013 in that we are actually operating on this world class deposit, the high court and Court of Appeal trial has ended, we have strengthened our board and management team, nickel prices are rising and the Sumitomo kamikaze pilots have flown their last flights,
So I suggest to you all to just take a chill pill and enjoy the ride – but if it is not for you then just sell your stock. Or pick up the phone and speak to the company, as I did recently.
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