The Company has recently switched its focus to South America where it has entered into option agreements to earn up to 75% in two Cu+/-Au+/-Mo porphyry projects in Southern Peru, namely the Condoroma and Coporaque, Projects. Significantly the projects are situated along the highly prospective Andahuaylas-Yauri belt, a known host of several world class Cu+/-Au+/-Mo deposits.
RISK ANALYSIS
- The Company is primarily exposed to copper and recent declines in base metals on the back of the European debt crisis together with poor economic indicators in the developed economies could put further pressure on base metals in the medium term.
- Further declines in equity markets may continue to put pressure on junior resource companies as investors switch out of “risk” into perceived safe haven investments. Our medium term view is that the risk premium has been eroded for many junior resource companies and we see near term upside.
- Political unrest in Peru, which had a traditionally strong union base, could see an increase in risk rating for the country and a decline in exploration and mining activity. Proactive Investors does not perceive this to be a significant risk at this stage however the recent confrontation over US$4.8b Minas Conga development between President Humala and local protesters – which also included the declaration of a state of emergency, demonstrates that clashes between local farming communities and multinational mining companies are set to continue for the foreseeable future.
- There is a risk that AXG will not be able to raise sufficient funds to either exercise the option or meet the expenditure obligations as set out above due to the prevailing difficult conditions for riskier asset classes.
Axg Mining Fpo Share Price (AXC) Stock Quote and real time streaming Axg Mining Axg Mining Fpo Historical Share Chart January 2011 to January 2012
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