Alexander Mining (AXM) is a £17M company whose main asset is a proprietary heap leach technique for Cu (and Zn). It also has 2 South American projects (Cu/Ag in Argentina and Au in Peru) but these are effectively on ‘care and maintenance’.    It had a cash position of £4.18M at the end of June 09. Expenditure was £0.7M for the previous 6 months and has presumably continued to be low.

Recently the company has received requests to use its proprietary techniques under licence - and one non-binding offer to buy them outright.

The company’s website is here:   http://www.alexandermining.com/

The latest company presentation (for the AGM June 2009) is here: http://www.alexandermining.com/user_files/downloads/LATEST_Presentation_AGM_3_Jun_2009_FINAL.pdf

It gives a useful summary of the company and its AmmLeach system. Slide 28 suggests that using the company’s process would save a Cu miner $2.80 per tonne of ore processed. Slide 19 extrapolates this to $143M over a 10 year mine life for a mine producing 50,000 tons of Cu pa.

Over the past year or two there has been a fair amount of interest in the process and the AGM presentation reports that 11 miners were paying at that time for test work. The subsequent approaches received by the company to use the technique under licence (or buy it outright) were reported in this RNS dated 4 Feb 2010: http://www.londonstockexchange.com/exchange/prices-and-news/news/market-news/market-news-detail.html?announcementId=10365590

The company promptly commissioned an independent report into the savings that might be attributable to the technique and is going to appoint an adviser on its commercial valuation.

Valuation:  I haven’t much of a clue as to how much licence revenue the technique should generate - or the value of an outright purchase. Bag of a fag packet calculations would suggest that licencing 3 mines, each producing 75,000 tons of Cu from ore grading at 0.6%, with a licence fee of 50 cents per ton of ore used, would generate about $19M pa. Alternatively, a 0.5% royalty on the Cu sales (at $7,500 per ton) would yield about $8.5M pa. Since Slide 16 states that global Cu production is 17M tpa there would appear to be scope to increase these figures, but they should not be taken as authoritative in any way.

Technical Risk:  One thing bothers me - Slide 22 of the presentation gives a history of several previous attempts to heap leach using Ammonia…

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