Axiom Mining Limited (ASX: AVQ) is a metals and mining company, which has a strong presence in the Asia Pacific region, and is led by a diversified portfolio of projects in Australia (Cardross Copper-Gold-Silver Project, Mt Molloy Copper-Zinc Project etc.) and Solomon Islands (Isabel Nickel Project and West Guadalcanal Project).
On 23 April 2019, the company had released updates, with respect to its San Jorge deposit at Isabel Nickel Project, the reason for its decision to begin the mining operations at San Jorge and on the proposed first customer shipment.
Axiom has decided to continue mining activities at the site through short-term leasing of the fleet of equipment, which included a 44k litre fuel tanker, four excavators, a roller/compactor and other equipment. The mining work had already commenced shortly after the late January 2019 period, but due to Cyclone Oma which impacted the Solomon Islands, caused massive disruption to Axiom's mining operations throughout February 2019 period, primarily due to ground and weather conditions.
Besides, in the late March and April 2019 period, the operations were affected due to Solomon Islands general election, held on 3rd April 2019. During the election period, the availability of inter-island transport to supply labour, necessary materials and consumables required for operations were reduced significantly. The elections also mandated the company to release the workforce, so that they can go to their home islands to vote. The impact of the above-mentioned factors was higher than what the company had expected, specifically on the company’s ability to recover time lost, due to adverse weather events in February and March 2019 period.
The mining operations have now, gradually resumed after the election period. Ore is being extracted, and the spotters are grading them visually, and through hand-held analysis equipment used by surveyors. Most of the workforce is back, and operations are focused on nickel ore extraction, grade control, stockpiling and ore drying activities. The company has further plan for this opportunity, which involves building the new roads to access new regions of the tenement, opening new pits and beginning of extraction and mining work etc. Additional funding for the plans would be required, which might potentially be provided by Traxys.
The first shipment of nickel ore (expected volume of 55,000 WMT) will be purchased by Traxys Europe S.A. on customary nickel ore trading terms. This includes a significant provisional payment to be made shortly, after the exchange of trade documentation on the loading of ore to ship. The balance amount shall be payable after the delivery and final testing for weight and quality.
The rationale behind the commencement of mining at San Jorge
The company’s decision to mine was based on its assessment of potential nickel ore composition information contained in the historical information and its own assay work. It has also done the internal cost assessment based on fuel prices, fleet and equipment costs and mining equipment specifications, supplier quotations and cost proposals for material items etc. However, the company acknowledged significant risks associated with its strategy of commencing mining operations at San Jorge.
On 15th April 2019, AVQ responded to the ASX query about company’s failure to report the change in one of its director’s interest within 5 business days.
The stock of the company last traded at the price of A$0.048 on 18 April 2019. Also, the company had announced on 23 April 2019 that its shares had been halted from trading on ASX on the its request, owing to pending announcement regarding capital raising and operational update. The trading halt is anticipated to be uplifted by 26 April or when the announcement is released to the market (whichever happens earlier).
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