On Sunday I published a podcast on – inter alia – Alexander Mining Plc (LSE: AXM) and this post is for those who missed it and to cover Alexander Mining in a bit more depth.
Alexander Mining describe themselves as “a mining and mineral processing technologies company” which includes their AmmLeach(R) process as “the only economically viable method to unlock the value of hitherto problematic zinc oxide deposits.”
They released their interims last week on 10 April 2015 reproduced below and my thoughts on the numbers:
The only thing to glean from this is that Alexander Mining lost less money last year than it did in the previous year primarily due to a smaller operating loss. Can a loss ever be seen as a positive?
As noted in the podcast, because cash and equivalents have been decimated from the previous year the balance sheet looks precarious. Indeed the current ratio sits at a ridiculous 0.40 and the balance sheet is in negative equity owing to total liabilities eclipsing total assets by a ratio of more than 2 to 1.
I cannot see how Alexander Mining are going to strengthen the balance sheet without issuing debt or equity it’s not like they’ve not done it before:
Tell me: would you invest in this business based off of these numbers?
As I mentioned in the podcast Alexander Mining were also having great difficulty commercialising their offering during the financial year:
- A commercial licence, financing and consultancy agreement with it’s largest shareholder (Ebullio Group) came to an end
- Phoenix Global Mining (‘PGM’) had confirmed its interest in investigating the use of AmmLeach(R)… who subsequently decided to drop this opportunity for commercial reasons
- Alexander announced in September that it had signed an option agreement (‘Option Agreement’) with a mid-tier mining company (the ‘Entity’) the Entity… although a highly detailed and favourable technical due diligence was conducted, unfortunately the Entity had a change in its corporate plans due to a need to focus more on its domestic growth strategy.
Matt Sutcliffe, Executive chairman:
the Company will continue to work hard to succeed with the commercialisation of its technology… the exciting opportunity with Compass offers Alexander a most encouraging start to 2015 and I look forward with considerable optimism. As always, I would like to thank the Company’s shareholders for their support and also our employees, consultants and directors for their highly-valued effort during the last year.
I do hope that the options to over 10 million Alexander shares granted to Compass to sweeten the deal turn out to be a good move for shareholders although recent history would suggest otherwise.