Well it has been a while since I have been on here but I have a little time to back track through some of the more entertaining posts which include some ill-informed people (and obvious Sumitomo operatives!) I have seen complaints about those wanting more information on the trial, the time the trial has taken, no news on other projects, too many shares on issue and the usual confusing and random news articles in the local Solomon’s press.
Here’s my few cents worth on the above (and happy to provide since I am have now got back into the stock…!) and after I spent the day at the races with RM watching my boys Spirit and Temple of Boom fight it out in the Stradbroke on the Saturday in Brisbane….. The reality was that (and always in in any court matter) it is very difficult for a party to a trial to provide commentary. The parties to a trial need to (MUST) submit to the judge’s ruling. There can be no pre-judging or influencing of those inside the court or the general population as to which way the case is going. If this is breached they ran the risk of being held in contempt and in doing so throw away all our money we have spent these past few years. The situation is that one person alone and only really knows what the outcome is – the judge.
Yes, the trial took longer than we all expected but, really, Sumitomo are massive – we have all read stories and seen movies where the big corporates bully the smaller payer in court and drag out the proceedings. This trial is no different, actually this trial epitomises such a situation. I for one am glad the company could take us this far. If you go into the detail you will see that it was the plaintiffs (Sumitomo) that continued to bring up witness after witness in the hope Axiom could not go the distance. Also with the trial going for so long it was not just the cash expenditure that was an issue but management had to contend with hosting and managing three litigators and three barristers in Honiara for eight months! PLUS manage the company AND the landowners who were also under extraordinary pressure in being confronted by a High Court trial.
So on one end of the spectrum you had the top end of town (lawyers) working and living in a third world country and the other indigenous landowners who had to be put through the nation’s longest running trial. Notwithstanding what goes on in court, the complexities of with two very different groups of people in a highly charged situation where power and communications are no guarantee. Coupled with that there was flooding’s, earth quakes and riots….And these are just some of the things we can see. We can only imagine what else goes on behind the scenes….aka Café incident ?: It was interesting to hear that the café owners was represented by none other than Sumitomo’s lawyers and that the judge threw it out of court. Sumitomo have done their best to harass RM and his team with such situations – these are the things we do not see. Think about these various newspaper articles and so called consent orders….they know that Axiom is run by RM who is based in Solomons. So if they can frustrate Axiom’s shareholders/investors/potential JV partners/potential customers then they will continue to do so in the hope that RM has to travel back to Oz or Asia to explain such situations. In doing so wasting his and managements time and taking him away from the “coal face” (Solomon Islands). It also shows the desperation of Sumitomo to enter into such antics and probably highlights they don’t hold much hope for the actual trial/case for themselves.
So when people here are jumping up and down about some article in the local Solomons press it reinforces Sumitomo’s resolve to continue to drum up such rubbish. For instance, a few weeks back there was supposedly an article about an Isabel Member of Parliament saying “no” to mining on Isabel. I have no idea whether that MP said that or not but I have been to Isabel and there is no internet connection and next to no mobile phone coverage. What I am suggesting is that quite easily the message could have been miss translated.
There is a government there desperate for mining to occur for obvious economic reasons. ALSO if you look closely at the author of the article, this guy seems to write a lot of pro Sumitomo articles over the years and then if you dig deeper you will find that his job previous to becoming a reporter for the Solomon Star was actually as an employee for the Embassy of Japan in Solomons….Say no more! So what I am saying here is rely on your directors of Axiom to provide you information in the form they are legally obliged to do so – through the ASX.
Other projects: well clearly looking at the Qtrlys and other announcements the focus has been on Solomons. Hence the West Guadalcanal project. They have operations there already due to the trial/Isabel project and so make sense (ie cost savings) to focus other exploration activities there. The WG projects looks a bloody ripper – one of the previous owners of the tenement Nugini Mining had some serious budgetary constraints back in the 70’s/80’s and had to decide to develop WG or their other prospect called….Lihir Island (yes, now owned by Newcrest). So understandable that Nugini left it. Then a just a few years back Newmont tried to pick it up and it ended up in court over the rights with Xstrata’s JV partner beating them in court – Xstrata then JV’s it looking for copper. But then Xstrata head office was taken over by Glencore and a directive was made to pull out of the Pacific eg Frieda River.
Then comes along Axiom….the grades at surface and the consistency are unreal. You can virtually mine the surface. If you got those trenching grades and widths in a drill hole you would be happy but to simply get it at surface is something else. This project is a real Dark Horse that I am sure will surprise us all. So for those frustrated at what they think of lack of progress on the “other projects” keep look back at the announcements made as to WG.
Now think about our main game: Isabel. This year alone the nickel price has risen 30%. The Indonesians do not seem to be budging on the ore export ban and the opposition party agreed ith the policy too. Chinese nickel ore stock are diminishing at a rapid rate. If you look at the RCR report it states Axiom will make $54m when mining only 2m tonnes per year – that means it will take 80 years to mine the known deposit. And that deposit goes down to a depth of only 5 or metres??!!! So what happens if, like most other mines, they increase production? Say 4 to 6 m tonnes per year? $100m to $150m profit / year !!! If you put that on a multiple of 9 (like a lot of the producing small and mid caps) we get a market cap of $900m to 1.35bn. PLUS we still have the exploration upside ie proving more than the previously report non-JORC resource/deposit.
Therefore so what if they had to issue shares over the past few years to fund the case – how else would they do it? Considering the potential I am glad they stuck it out (and hence why I’m back in!). we also have the guarantee for damages and costs which is another kicker if we win ! And as always DYOR. For many who have asked the boys ran 2nd and 4th in the Group 1, RM had a ball and I've almost got him keen on a share or two in the stallion Spirit of Boom if we win the case
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