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Axiom Mining Partner Anitua Extends Support

Axiom Mining's (ASX:AVQ) strategic partner Anitua Limited has demonstrated its confidence in the company and its Isabel Nickel Project in the Solomon Islands by converting the A$5 million unsecured loan into equity at $0.02 per share.

This represents an 82% premium to the company's last traded price of $0.011.

In December 2014, Anitua agreed to negotiate arms' length commercial terms for provision of a range of services to the Isabel Project in addition to providing the loan.

Anitua is a highly experienced exploration and mining services contractor in the Pacific region and one of Papua New Guinea's most successful companies.

Its clients include ExxonMobil, InterOil, Newcrest (Lihir Gold) and Ramu NiCo.

"Anitua's agreement with us to convert repayment of the loan into fully paid ordinary shares in our company at a premium of 82% demonstrates their confidence in the Isabel Nickel Project," chief executive officer Ryan Mount said.

"Axiom remains committed to achieving the target of establishing production by late 2015 with the support of partners such as Anitua."

Anitua Executive Director Colin Vale added that his company was focused on ensuring that Axiom delivered on its development plans for the Isabel Nickel Project.

Anitua Group

The Anitua Group was founded by a group of Lihir Island landowners in 1989 and currently employs over 3,500 people in Papua New Guinea.

It provides a breadth of services with the ability to provide complete end-to-end solutions in areas including contract mining, road work and civil construction, mine site support and earth moving, and mining training services.

Isabel Nickel Project

The project is owned by Axiom KB (Axiom 80%), where KB stands for Kolosori and Bungusule being the two original customary landowning tribes, who collectively own the remaining 20% interest.

In January, Axiom extended previously reported high grade nickel laterite intersections at the Isabel Project in the Solomon Islands after including previously quarantined, near-surface samples.

Top results from Isabel are now:

- 20.7 metres at 1.74% nickel from surface including 12.45 metres at 2.28% nickel from 8.25 metres(ISD14-003); and
- 15.9 metres at 1.94% nickel from 1.5 metres including 8.4 metres at 2.59% nickel from 7.5 metres (ISD14-004).

This compares to previous results of 18.2 metres at 1.88% nickel including 12.45 metres at 2.28% nickel; and 13.4 metres at 2.01% nickel including 8.4 metres at 2.59% nickel.

It has commenced the initial orientation drilling program and is continuing to test the full depth of the laterite profile around the Kolosori Ridge test pit area.

It is also planning to undertake diamond drilling on the Havihua Ridge area, located 2 kilometres east of Kolosori Ridge, to test the laterite profile in an alternative geological setting.

The Kolosori tenement covers 49 square kilometres on Isabel Island and is covered by Axiom's leasehold and prospecting licence.

It has historic and non-JORC resources estimated at 159 million tonnes at 1.045% nickel and 0.07% cobalt.

Low cost open pit mining can very quickly generate a direct shipping ore that significantly reduces both operating cash cost and capital cost for plant, power requirements and infrastructure.

Analysis

The conversion of the A$5 million loan into Axiom shares at a 82% premium clearly demonstrates Anitua's confidence in the Isabel Nickel Project.

This is further highlighted by the pending Court of Appeal hearing relating to Axiom's victory in September 2014 over multi-national behemoth Sumitomo in May.

Axiom is set to receive $4.8 million in court costs from the original ruling and could receive a further award for court costs if Sumitomo's appeal is dismissed.

Together with the original loan from Anitua, the company is well funded for continued drilling in 2015 with the aim of upgrading data across the deposit to JORC standards, and completing relevant studies to progress the project towards mine development.

Isabel is expected to be a low cost open pit mining operation that can very quickly generate a direct shipping ore. This will significantly reduce both operating cash cost and capital cost for plant, power requirements and infrastructure.

Axiom holds a 50-year registered lease and Prospecting Licence over the Isabel nickel deposit and is targeting the establishment of a direct shipping of ore (DSO) operation by late 2015.

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