AXMIN Inc V.AXM.H

SP Target $0.40

[Time4TA]

AXMIN back from the dead
Peter KovenFeb 1, 2011 – 10:00 AM ET| Last Updated: Feb 1, 2011 1:19 PM ET
For a couple of years, the company was going nowhere. But after receiving a mining license and completing a positive update to a feasibility study, it is looking likeAXMIN Inc.’s Passendro gold project in the Central African Republic (CAR) could finally go ahead soon after the government subjected it to long delays.
Paradigm Capital analyst Don Blyth wrote that the feasibility update shows that the project is now “both technically and economically more robust” and well-positioned to take advantage of the hot gold market.
The key challenge now is project financing. AXMIN needs to secure about US$290-million to develop the mine, according to Mr. Blyth’s calculations. Assuming a 50-50 debt-equity split, close to US$150-million needs to be raised through equity. That is no easy task for a company with a market cap of about $112-million.

“Certainly any steps that can be taken to increase the share price at which the equity is raised falls quickly to the bottom line in adding value,” Mr. Blyth wrote. He figures that a debt financing will lift the share price and set the stage for the company to raise the equity and finally begin construction.
He raised his rating on AXMIN shares to “speculative buy” from “hold,” and nearly tripled his target price to 40¢ (from just 14¢). While political risk in the CAR remains a significant risk and the government has delayed the project in the past, he is more confident about the future of the company than he has been in years.
“This is a [$1.5-million-ounce] gold reserve, feasibility complete, permitted and ready to build — all held within a company with a current market cap of $112-million,” Mr. Blyth wrote.
https://business.financialpost.com/2011/02/01/axmin-back-from-the-dead/