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AIM Listed Alexander Mining (LSE:AXM) has not been one of my better tips from my 12 years at t1ps. Recommended at 6.625p in June 2008 the shares are now 4.75p. I was urged by some former colleagues to dump the shares at 2p in the summer but (unlike them) I bothered to speak to the management. The company is now starting to deliver ( at last) and there is now a growing case for rating the shares as a buy.
Alexander started out with a plan to build a silver mine in Argentina. But the Argies changed the tax rules and the board, prudently, sold up to focus on its second leg – the development of its AmmLeach technology. Essentially this is a process for treating rock to produce metals which offers the scope for vast savings for miners that use it. This is patented technology.
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Alexander’s founder, Matt Suttcliffe – who is quite possibly the most politically incorrect man on this planet and that alone makes him worthy of support – – has spent the past couple of years trying to find miners to take up this technology for specific projects in return for a) cash and b) a royalty stream on that project.
Now he seems to have struck gold. Or rather copper and cobalt. On 28th November it was announced that the first such project is now going ahead in association with Metalvalue in the Democratic Republic of Congo – on a potentially vast copper Cobalt project. Metalvalue is also to pony up, up to £1 million for New Alexander shares issued at 3p. The placing should be smaller in that Alexander is now doing consultancy work for Metalvalue and fees on this will be netted off. I.e. Alexander gets the full Bernie but may have to issue fewer shares.
And Metalvalue is looking at a stream of other projects for Ammleach. Meanwhile Suttcliffe is still free to sign up other deals for the technology ( now commercially validated) with other players across the globe.
Following this deal Alexander has no financing worries and is, effectively, sitting on well over £1 million cash. On a fully diluted basis the company is capitalised at a maximum of c£8 million. The royalty streams Alexander hopes to earn on a single mine are on an annualised basis easily in excess of £1 million. Get even one mine up and running and the shares look interesting, two and this stock is very cheap.
I would like to see another contract signed before filling my boots but at this stage a nibble is justified,. Suttcliffe is now starting to deliver. Speculative buy.
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This explains the 50% rise in the share price over recent days! Been buying a few Tom?