Still Broke The magic $5 million debenture gets AXI back on its feet, keep its lights on, and keeps Wardrop's account paid up, but it doesn't change the fundamental situation. AXI is still dead broke.
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The Roche Bay feasibility study, which began early in 2011, was originally slated to cost $20 million (this is in line with industry standards, 2% of the total projected project capex of ~$1 billion). AXI obviously hasn't been able to get its hands on $20 million. Can Wardrop produce a slimmed down feasibility study for, say, $10 million? We shall see.
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Regardless, nearly all of the $5 million debenture has to go to Wardrop to maintain or finish the feasibility study work. There's no cash left for Tuktu, West Melville or general corporate expenses. How does AXI keep going this year?
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Hence AXI's board is considering restructuring of all its assets. A successful spin out or sale would bring in much needed cash for the 2012 field programs. Don't expect XinXing to be a white knight and plop $50 million into AXI's accounts anytime soon, it's not happening for a while. (XinXing's going to need to see the feasibility study, then its internal review process could last many months.) AXI needs cash now. Expect an equity raise soon, either for AXI directly or for a new venture exchange spinout vehicle for Tuktu.