time starts now

I hold and am optimistic I will not comment upon other posts. There are quite a few wounded folks out there among you HC posters, and I understand the pain. I bought in again yesterday and have known this company for several years, having held shares in its halcyon days and then moved on before the decline. I got lucky once and plan to be lucky again.

This post is aimed not at up or down-ramping. There are elements of the annual report that came out today which are positive. I for one do not believe that AXM will go bust. The 9:2 cap raising, plus the fact that they are a producer as well as an explorer augur well for at least some kind of future imo.

I also spoke with a friend of mine who is an employee of the company, and not in the management. What he told me was optimistic as well, (and certainly not insider trading information!) that being that changes have been put in place that should turn things around. The mining operation itself suffered on a technical level, but new techniques and technologies are being brought on line so that things go well into the future.

Of interest to me in the report are the following statements:

"Further information on the likely developments and expected results of operations of the Group have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group."

I believe that this statement was one that the market liked:

"On 25 September 2009, it was announced that the Group is undertaking a fully underwritten nine-for-two (9:2) renounceable rights issue to raise $108.6 million at an offer price of 4 cents per share. Approximately $53 million of the proceeds will be used to repay the Company’s senior secured notes, representing a full extinguishment of the Notes. The repayment terms represent a 12 per cent discount to their face value. The remaining funds will be available for working capital, mine development and $10 million to repay a short term facility."

And finally:

"Subsequent to the cash receipts, share issues and debt repayment, the Company will have proforma net assets of $90 million as shown in the Prospectus."

They are drilling as we speak and the plan is to be producing from not one, but several mine sites...and soon. The gold price as I write is approaching U.S.$1000/ounce again, and if it pushes much higher, the forecast income will be exceeded.

It is the market and not the company which determine the sp. In fact, it's us. The sp will be set according to what is thought to be the company's future, not its past. Since the ann, the sp has risen, not fallen, and I believe that any quantum of positive news from here will produce a rapid, if contained recovery of the sp back through the single digits. The company produces gold, it is not a mere explorer. The ground it has contains gold and that's fact, not hope. Mergers and takeovers look for ailing companies, so there is further reason to believe that in the worst case scenario, there will be a medium-long term payoff for the investor.

An example comes to mind: VPG, which is a REIT. I bought shares in that company when they were at .04 in the darkest days of the "global financial crisis" because they decided to bite the bullet early - restructuring its debt and writing down losses in a big way, where others just tried to plug holes and hope for the best. I sold my shares in that company last week for .15, and I will buy back in after the rights issue sees people cash in their .10 shares. The company will certainly survive, and in the long run the fundamentals in terms of their assets will see it return to much higher levels again. The company fell from $2 to .02 cents if you want to see a horror story. The point is this: If appropriate action is taken to save a company with good assets, then its health can be restored.

These are just my thoughts, of course, and I hope that they give cause for a head-scratch at the very least.

And as I sign off, the price of gold has just rocketed to US $999.90

Have a good night and I look forward to your comments. Thanks in advance and I wish good fortune and the best prices to all holders, past present and future. "There's gold in them nar hills."