Core Gold DMMIF

RE: D-M-M...defined

[baystock1]

DMM use to be my largest position but now I have no shares. Since selling out 6 months ago, there has been no reason to regret this decision. Why invest your hard earned money in a country like Ecuador which clearly does not know how to treat investors. Ecuador is spoilt by having oil reserves sufficient to pay the bills and so there is no sense of urgency for developing their equally ample mineral reserves. I would recommend making the switch to a different junior gold miner located in a country which has put out the welcome mat for foreign investment. One such example is Axmin Inc. (AXM.V) which is selling for less than half the market cap of DMM and is developing a 200,000 oz per year open pit gold mine in the Central African Republic (CAR). The CAR is so hungry for this kind of mining investment that it is giving Axmin a 5 year tax holiday. I think axm.v is the mostundervalued soon to be intermediate gold producer and here is why:

-great managementwith established track records. The biggest shareholder with30% are thesame people behind Addax Petroleum which a year or two ago got sold tothe Chinese for over $6 billion. Also with the recent merger with aimlisted Afnat, they picked up the new CEO George Roach who hasthe Africanexperience and abilities to take the company to the next level as anintermediate gold producer. Roach was one of founders of UraMin which gotsold to Areva for $2.5 billion.

-asset base that can take themto 200,000 oz per year gold production with their first gold mine within 2years (BFS already completed, just needs updating) and then on to 500 –600,000 oz per year level in the subsequent years with their second andthird gold mines.

-absurdly low market cap of only C$82 million.Assuming 1.2 billion shares outstanding post mine financing, the $200million per year cashflow from their first mine at Passendro works out to16 cents per share.They can reinvest this cashflow to bring their second and third goldmines online with very littlefurther share dilution, thus increasing cash flow per share to around 40+cents per share 5-6 years out. Shareprice is now only 12 cents.

Below is more info for your DD:

George Roach President and Chief Executive Officer
Mr.Roach,the former President and CEO of AfNat, has been involved in the mineralexploration industry in sub-Saharan Africa for many years. Hehas extensive experience in securing and establishing mineralexploration tenure and operations throughout Africa namely,Central African Republic,South Africa, Chad, Mali, Namibia, Zambia andTanzania to a name a few.
Mr. Roach was a founding Director andManaging Director Africa for UraMin Inc., a uranium resource company withoperations in Namibia, South Africa and Central African Republic. UraMinwas sold for US$2.5 billion in 2007 to Areva. Mr. Roach maintainsinterests in G&B African Resources Ltd, a mineral exploration companyand in African agricultural projects, including a sugar estate in CAR under development and spice trading and milling operations in South Africa.

major shareholder Jean-Claude Gandur of AOG:
https://www.forbes.com/forbes/2007/1015/099.html

Trouble Is My Business
Christopher Helman 10.15.07, 12:00 AM ET
Billionaire Jean-Claude Gandur has braved war and corruption to build an oil empire on the cheap.
Recently ahuge explosion shook northern Iraq. Not the usual kind. This blazing fireand billowing black smoke came from a test drill at Taq Taq, an oilfield30 miles southwest of Irbil in the Kurdish region. With no pipeline orstorage tanks in place, Addax Petroleum had little choice but to burn offthe oil rather than let it soak into the rocky ground.Opening the wellfor a few minutes revealed a true gusher: a flow rate of37,500 barrelsper day. Considering the results from three other wells alreadycompleted, engineers figure that Taq Taq holds more than 2.7billionbarrels of high-quality crude and could produce as muchas200,000 bpd forten years.
One small problem: Iraq's parliament still hasn't signedoff on a federal oil law, putting the entire $500milliongamble injeopardy. Jean-Claude Gandur, Addax's chief executive,is pushing aheadanyway. "It is absolutely unbelievable the quality of oilfields untappedin Iraq," he says. Gandur would prefer to have a law and an export licensein place. But in a pinch he figures he can sell oil--up to 20,000barrels a day--to a refinery he'll help build Kurds, or hawk itstraight out of the ground. "Peace has no value to our assets."
Gandurknows his way around trouble. Most of his businessis in restive Nigeria,where Addax produces 100,000bpd--overshadowed by only Shell, Exxon Mobil(nyse: XOM - news - people ),Chevron (nyse:CVX - news - people ), Totaland Agip. The company is also pursuing prospects in Cameroon and Gabon.Wherever it ventures,Addax does very well. Over the last 12 months itnetted $300 million on revenue of $2.5 billion. Run out of Geneva,Switzerland, Addax is listedon the Toronto and London exchanges;Gandur's 24% stake is worth $1.5billion. His m.o.has long been buyingassets on the cheap--and making nice with strongmen. "Jean-Claude is ableto open the doors and negotiate on his feet," says Martin Molyneaux, ananalyst at First Energy (nyse: FE- news- people ) Capital, a Canadian investment bankin Calgary, Alta.and anAddax underwriter. "He is very good atinteracting with people."People close to Sani Abacha, the late dictatorof Nigeria, for example.Gandur has also been dubbed Commanderofthe National Order in Benin, has a diplomatic passport from Senegal,andfor ten years was the honorary consul in Geneva for thecivil-war-rivenRepublic of Congo.
The son of a Swiss pediatrician,Gandur, now 58,grew up in Alexandria, Egypt,where he learned Arabic,fell in love withhistory and began a life long devotion to Egyptian antiquities. Hestudied law and political science at the University of Lausanne. In 1976he went to work at the Philipp Brothers trading house in Zug, Switzerland:"the best school in the world," he says. There hebecame a successor toinfamous trader Marc Rich, who had left the company in 1973. Early onGandur gravitated to francophone Africa and became manager of Philbros'African oil trading operations. After stints atrival trading houses, in1987 he and three partners set up their own westAfrican tradingoperation, Addax & Oryx Group, named after twomembers of the Africanantelope family.
Soon AOG began acquiring physical assets tobackstop trading positions, picking up oil storage tanks, petroleumdepots, liquefied petroleum gas and oilfields. The company even branchedout into gold mines (Gandur is chairman of Toronto-listed Axmin).

https://www.miningweekly.com/article/car-ministers-in-push-to-reassure-investors-on-axmin-gold-project-2010-10-05
CAR officials in show of support for Axmin gold project
By: Liezel Hill 5th October 2010

TORONTO(miningweekly.com)– Senior government officials from the CentralAfrican Republic (CAR) metmining analysts and institutional investors inToronto on Tuesday, in aneffort to help bolster the financial community's view of junior Axminand its Passendro gold project in theCAR.

Axmin received a25-year mining licence for Passendro inAugust this year, and now has allthe permits and approvals it needs tobuild the mine.

Under theterms of the licence, Axmin will pay the CAR government $11-million inthree tranches and the government has received 26-million Axmin shares and20-million warrants, instead of the10% free-carried interest in theproject to which it was entitled.

The government has alsomaintained all the fiscal terms agreed to in amining convention, orcontract, signed with Axmin for the Passendro project in 2006.

These include a five-year tax holiday,exemptionfrom duties and VAT on capital equipment, consumables and mining contractfor the duration of the mine development and five years there after. Thegovernment royalty on the project was also held at 2,25%,as specified inthe convention.

Speaking through a translatoron Tuesday, CARMinister for Mines lieutenant colonel Sylvain Ndoutingai said that themining conventions between the government and private mining companies arestructured to provide security for the foreign investors.

Governmentscan change, the mining law could bemodified by the Parliament, butcompanies are protected by stability clauses in their conventions, hesaid.

He pointed to the factthat Axmin's licence includestermsagreed to in its 2006 miningconvention, despite the establishmentof anew national mining code in2009, he said.

Ndoutingaisaid thatthe Passendro project – whichwill be the first modern goldmine in theCAR - has the full support ofthe government.

He actuallyindicated that he intends to putpressure on Axmin to get theprojectmoving as quickly as possible, andsaid that the State has nointention ofselling the shares it received inthe company.

The CAR has gold,diamonds, uranium and iron-ore,and the governmentwants to attractinvestors to explore for those andother metals andminerals, Ndoutingaisaid.

PRODUCTION IN TWO YEARS?
Axminis busy updating andoptimising its April 2008 bankable feasibility study, and plans to havethe document ready by the end ofthe first quarter of 2011, although itwill aim for an earlier date, CEO GeorgeRoach said in an interview onTuesday. The company has revived the process towards arranging financingfor the mine, and this week issued an information memorandum to a numberof banks, he said.

Axmin is looking in particular at SouthAfrican export credit opportunities, as well as entities like the WorldBank's Multilateral Investment Guarantee Agency. “And the reason for thatis that South Africa's Senet is leading the BFS, so a lot of equipment isgoing to come out of South Africa,” Roach said. “So if we can get exportfinance dealt with there - and the negotiations are already in progress -it's going to make everything so much easier.”

There is quite alot of interest in the project, CFO Alex Dann said.“But the banks and theequity markets want to see the final project economics and the technicalinformation,”he said.
In March 2009 Axmin looked at a smallerproject scenario, given the difficult financing environment at the time,but the company is reasonably certain that it will be building athree-million ton a year operation, as envisaged in its 2008 study, Roachsaid on Tuesday.

Annual gold production was forecast at 203 000 oz/y in the feasibility study.

If thecompany completes its updated study in the first quarter of 2011,itwould likely only start drawing down finance in the third quarter,Roach said.

The firm has agreed with the governmentto aim forfirst production within 24 months, although it can apply for exemptionsto the deadline.

“We'd like to be in production in two years, and that's what the State would like to see,” he said. “But it's tight.”

Shares in TSX Venture Exchange-listed Axmin dipped 8% on Tuesday, to 11,5 Canadian cents a share.
Edited by: Liezel Hill


Fact sheet:
https://www.axmininc.com/site/Investorsnbsp/FactSheet.aspx


https://clients.westminster-digital.co.uk/minesite/microsite/events/31/index.aspx
fast forward 2 clips

cs/user/print/co/479?x-t=pub.view&id={id
"I’vereallybeen keen on AXMIN. It’s got probably three million ouncesin the CentralAfrican Republic. AXMIN is extremely well-placed, I think. It has justover 200 million shares and trades about 80 cents.But given the number ofounces it’s got in the solid resource category in CentralAfricanRepublic, as well as they’ve got unfolding resources in both Mali andSierra Leone, it’s a fascinating African play."(11/29/07)
- JOHN EMBRY, SPROTT ASSET MANAGEMENT
"Going alittle further a field, there's AXMIN (AXM.TSX.V). It just gotannihilated. They have four million ounces in theCentral African Republic. It was at $1.40 and is now down to $.15. You’rebuying the people because they discovered the Geita Mine, now inproduction in Tanzania, which is one of the more successful mines inAfrica. This is the best exploration team in Africa. They’ve got thisproject inthe Central African Republic with a proven reserve and, thenanother one in Ghana and a third in the Sierra Leone, which they’re movingforward.The stock has been blasted, but they’ve got Audax Petroleum,one of the big Swiss oil companies, which owns 50% of this company, toback stop to any extent required. There's no financing risk; they haveassets;and the best mine-finding team in Africa. You get all this for$30 million."
- The Gold Report Interview with John Embry, Sprott Asset Management (09/12/08)