GE thanks for your advice. Apex WAS loosing money on every ounce they produced. The current situation remains to be seen. I have also touched it with more than a barge pole,as you would say about a new friend of the opposite sex,however,with all messy businesses i have my safety disposable gloves on(limited my investment),incase there are unknown hidden nasties about.
I have done my own DD and looked at others as well,some of it years old. Yes,the place was a right mess,is still a mess,but getting less messy by the day.
My level for calculated risk is different than yours and others.I prefer odds on favourites at time of purchase,such as FML,NST,DRA,CSL All of which i no longer hold only because funds are better utilised elsewhere,including some here on the same basis.
Was this company on the brink of collapse,i suspect so. Is it now,i doubt it. Was the plant in a perilous state-yes.It is less perilous NOW-yes Was the yield low-yes.Is it rising NOW-yes
Yes,its been a soak hole for cash,with leaches in the form of GUP notes taking the upside at low production levels,leaving NO CASH to grow the business,with costs of development getting to stoping ore excessive.Along with less than efficient stoping plans.HP contracts for plant with fat maintenenance contracts,issues with poor onsite supervision and so forth.
Note the importance of redesigned stoping plans to get more economic ore.That is another tipping point for the better.
Quite simply,see a $44m company,now AT THE ORE(not doing 7? development drives at $7000/mtr as prior(2yr old figure) Parrallel ore seams appearing with access from existing drives(AT THE ORE)Subtle notice,they're doing it. which of these issues and outstanding ones haven't you seen efforts being made to address?
This place appears to be going down the path of being put to rights,I HAVE SEEN THE CHANGE,when you hit that tipping point,when having done it myself in a plastics company,some 30yrs ago,the point of tipping is sharp and dramatic.only with hindsight can you pick the exact moment.This business is chicken feed by comparison,with no need to keep customers buying while your unable to supply,due to broken equipment,bad debts,lack of raw materials and peeved staff(without customers,no amount of money coming in would keep you going)
If i'm right what's an economic mine producing 60-80koz a year worth.With capacity for twice that or more? I suspect multiples of $44m
I can only suggest,if anyone has difficulty understanding how quickly things can turn for both good OR BAD,then get a copy of Malcolm Gladwells "THE TIPPING POINT".It's also in audio book form.He has an amazing mind and the ability to analyse what appears complicated or unrelated and destroy your preconceived views of the world, presenting it in such a simple and logical manner. He has given me a considerably better understanding on how simple most answers are and i continue to look for and seek those tipping points,before others do to my benefit. Recommend his other book "outliers" as well,it destroys .... best not spoil the book If anyone does not end up richer(understanding or investment) from either of these books,i would be greatly surprised.
DYOR -IN LIFE - If you can't change it,or it isn't changing after 30 seconds of you involvement----WALK AWAY---- and focus your energy on what you can change or do something personally enjoyable or constructive like fishing or going on holiday.
AXM Price at posting:
0.7¢ Sentiment: Buy Disclosure: Held
