Argex Titanium Inc. ARGEF

There are 3 things......

[morricone]

......this company needs to do going forward:

1. They need to continue to prove in their mineral extraction processes and get them up and running in a real life production operation. They continue to make good progress here but there's a long way to go and a lot of risk.

2. They need to raise perhaps hundreds of millions of dollars in the years ahead to get the various stages of mine, infrastructure and transportation up and running. Banks don't usually give loans out on moose pasture, no matter how valuable the turds, and certainly not hundred million dollar loans. There are numerous venture capital firms, but most of the ones in Canada are rather small and can't handle a world class project of this size. The return they expect is rather stiff no matter what. And they can't help you with the next item:   

3. Argex needs to find international markets for the enormous amount of iron and titanium powder they will be producing. I think it's naive to think that if we produce it buyers will appear. Most large buyers are locked into long term contracts. Even if they weren't, if you try and sell product at a lower price (and why would you want to???) buyers will just go back to their existing suppliers and ask them to match it, which many probably will.   

I think a JV is inevitable and desirable. A large partner brings deep pockets with him which takes care of item #2 above. The right partner also will have access to the customer base you need (item #3 above), either using a lot of the product themselves or helping with the distribution. Yes, you have to give up a lot with a JV, but you can get up and running with a viable business very very quickly. Try doing that from scratch on your own.

Although there are several countries such a  partner could come from - India and China in particular, I would guess China is most likely especially since they just got screwed over in Australia by the government there with the new tax on iron. If I was a Chinese resource company I'd want to take my next vacation kicking the tires in a more tax friendly jurisdiction like Canada.