flying under the radar

Thought I'd share with you the reasons why I bought today and hopefully provide a useful summary regarding where I see the potential over the next 9 months

Shares on issue - 181m
last price - 7.7 cents
current market cap - 14m
Top 20 holding - 65%

Options - 56m
Exercise price - 37.5 cents
Exercise date - Jun 2010
Top 20 holding - 57%

The % options held by the top 20 highlights the pressure on AXY to get things moving. Is obviously why the recent announcements say they are focusing on the 'fast track resource expansion and mine
development at current high gold prices and which affords Atom real potential to progress to gold producer
status with longevity of gold inventory'. They need to get this stock over 37.5 cents in 9 months and becoming a gold producer is how they are going to do it!

From the issue price and initial kick to nearly 50 cents in June 07, AXY has struggled to get things moving and the share price up until June this year tracked slowly downwards. However in June they announced a JV deal with THX for their NT permits and more recently acquired the Kalgoorlie North Gold project which from due diligence conducted has huge promise. IMO the bottom of this stock was found and the wheels are finally moving again.

In the next 9 months the value of this stock is going to come from Kalgoorlie North Gold project. It has an 'Extensive package of 98 km2 of granted mining and prospecting leases covering 25km of strike'. The first announcement regarding the potential acquisition of this project stated that there seemed to be scope through for 'significant and rapid expansion of resources through evaluation of the existing exploration data base including 9,784 drill holes plus geochemical, geophysical and detailed geological data'. Given they have only had 2 weeks to review some of the data since the acquisition and already come up with an extra 100,000oz inferred, I'd say there is some serious upside here. I gained further comfort from the proportionally large % payment to the corporate advisors who set the deal up. They obviously were aware of the prospects.

AXY has $6m cash and no debt. In the annual report they state that they are going to make all of it available to progress the Kalgoorlie North Gold project. This isn't just through the revision of the 9,784 and remodelling of the prospects but through drilling! Today�fs announcement states that drilling is starting this month over a 5000m area to 'further increase the Resources at the Project and to upgrade Inferred Resources to Indicated Resources'. Only 4 more weeks until the core results start rolling in then we'll end up with an indicated JORC resource. Given the price of gold and the 366,000oz inferred resource I'm expecting we'll be presently surprised.

Finally is the ability of AXY to bring any indicated resource online. Being in the heartland of gold mining they have the benefit of nearology to infrastructure and processing plants required to fast track production. There commitment can further be shown through 'establishing a field office in Kalgoorlie to accelerate exploration and resource development in the Project area of the Broad Arrow�]Bardoc region immediately to the north of Norton Goldfields Limited�fs Paddington Gold Operations.' Optimistic to get into production by Jun 2010 but they have a huge financial incentives themselves and pressure from the top 20!

IMO a very good buy for the risk profile with the gold price tipped to run and the urgency they have to develop. Don't think this one will fly under the radar at $15m market cap for to much longer