🕐05.09.14 - 02:54 Uhr

RESOURCE CAPITAL RESEARCH [RCR] - RCR COMPANY UPDATE, AXIOM MINING LIMITED (ASX:AVQ), 28 AUGUST 2014





Fortbridge Media Release

Resource Capital Research [RCR] - RCR Company Update, Axiom Mining Limited (ASX:AVQ), 28 August 2014

Resource Capital Research has released an equity research report on Axiom Mining Limited (ASX:AVQ).

Axiom is approaching a defining moment in its history with the anticipated delivery of the judgement in September 2014 after more than 3 years in court battle with Japanese giant, Sumitomo Metal Mining, over ownership of potentially one of the worlds largest nickel laterite deposits, located in the Solomon Islands. Axioms legal case (aligned with local landowners) looks strong, and a victory over Sumitomo could open up an initial fast-track low-capex path to production of direct shipping laterite ore within 15 to 18 months. Furthermore, the company is also about to start drilling Porgera-style epithermal gold targets at its West Guadalcanal Project. We anticipate a potential near term doubling or tripling of the Axiom share price with a court victory over Sumitomo, with further upside from positive drilling results from the gold exploration.

Investment points:

* Judgement in the court battle over ownership of the large scale Isabel Nickel Project in the Solomon Islands should be handed down in September 2014.
* We estimate that the Japanese giant Sumitomo Metal Mining is spending millions challenging Axioms 80 per cent ownership of the project, clear indication that the project is of great significance to such a major company.
* Axiom has strategically aligned itself with the local landowners who have right of veto.
* Previous work (INCO, Kaiser Engineers) led to the establishment of an estimate of mineralisation (non JORC compliant) of 159mt at 1.05 per cent Ni and 0.06 per cent Co (equivalent to 1.6mt of contained nickel) to a depth of only 6 metres � meaning that this deposit, if confirmed as a resource, ranks with some of the worlds major tropical laterite resources.
* The timing is right � the 1H14 banning of the export of unprocessed direct shipping ores (DSO) from Indonesia, a major global supplier, has resulted in a more than 30 per cent surge in the nickel price and similarly stronger DSO prices.
* A 2mtpa DSO operation would give Axiom a low capex (A20-25m dollars) fast track route to production, generating strong cashflow (est. US dollars 50 mpa).
* Valuation yardstick: PSE listed Nickel Asia Corporation (16mtpa Philippines DSO Ni laterite production) share price has soared in 2014 (up 160 per cent) and it is currently capitalised at US140m dollars per million tonnes of annual DSO sales.
* Axioms West Guadalcanal Project, also in the Solomons, is throwing up some exciting results and an initial drilling program targeting Porgera-style epithermal gold targets is commencing this week.
* Axioms portfolio includes gold exploration assets in Vietnam and N. Queensland.
Share price catalysts: a favourable resolution of the Sumitomo court case in Sep 2014 and initial gold drilling results from West Guadalcanal (Oct 2014).

To view the full report please click the link below:

For more information please contact:

Tony Parry
T: +61 2 9439 1919
W:




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