RE: Precious Metals SummitOver the next to days The Northern Miner will look back at some of the stand-out presentations from the Precious Metals Summit, which took place in Vail, Colorado in mid-September.
Today's segment will look at presentations made by the chief executives of Axmin (AXM-V), Malbex (MBG-V) and CB Gold (CBJ-V).
AXMIN
George Roach took the reigns at Axmin over a year ago, and has been trying to drive the company's Passendro gold project in the Central African Republic (CAR) into production ever since.
The robustness of the project has been confirmed by two feasibility studies, but despite that the market has been slow to warm to the story.
Much of that may be attributed to a "political risk over-hang", Steve King, an analyst with BMO Capital Markets says.
That overhang is connected to the CAR government revoking permits a few years back. Since then, however, Roach has arrived on the scene, patched up relations with the government, brought them on board as a shareholder in Axmin, had the mining licence issued and even had the minister of mines make a visit to Toronto last year to speak with investors.
Despite all that progress it looks like Axmin will only win back investor enthusiasm once it shows it can build a mine, and to do that it will need to raise some significant capital.
Towards that end Roach says the company is in the middle of negotiations on the final installment of debt financing.
When and if that is secured it will be on top of the $100 million Axmin has already secured from the Standard Bank of South Africa.
In total Axmin will need to find $300 million to build Passendro, and the company wants two thirds of that capital to come from debt.
"We are very close to finalizing remaining portion of debt financing," Roach told the audience.
He also added that debt financing in the CAR is dependent on getting political risk insurance and at this point such insurance "has effectively been assured."
With 791 million shares outstanding look for Axmin to do a share rollback in the neighborhood of ten to one. That will give it a tighter capital structure and make the company more appealing to institutional investors when it looks to raise equity in the future.
Roach says it was prior difficulties with the government that resulted in the large amount of shares issued, as the company struggled to stay afloat.
But with those days behind it Roach is intent on driving Passendro into production.
If he can do it, Axmin shareholders should have a very profitable mine on their hands as production is slated to come in at 200,000 oz. per year at cash cost of just US$437 per oz.