Thursday, April 05, 2012

Alexandria Minerals (ALXDF) Exploring In Quebec

I'm not sure how this one ended up on my radar but I'll give it a quick once-over.  Alexandria Minerals (ALXDF / AZX.V) is one of those early-stage gold explorers that may have something if further exploration bears out their early results.  Their initial 43-101 estimate for the Akasaba property has some pretty decent indicated and inferred ore grades, but further exploration is needed to turn these into 2P reserves.  Road connections to the outside world do not appear in the photos and diagrams of the Akasaba property, so logistics should be a concern.  The Sleepy and Orenada projects also appear to need logistics development (based on their photos), although the inferred grades at Sleepy are more attractive than those at Orenada.

The trouble with property groups like these in the Cadillac Break is that they've been explored since the 1930s.  Drilling past historical depths of 150m will require more capital.  Alexandria had $1.8M cash and short-term investments on hand as of Jan. 31, 2012 and lost $372K in the quarter ending on that date.  This company's burn rate will likely demand a capital raise no later than the end of 2012 if it wishes to increase its chances of successfully completing its drill programs and final 43-101 reports.  Please note that I calculate burn rates very conservatively because I believe in paying bills with cash and not promises of future receivables or tax credits.

The CEO has a long background in running mining projects.  That's nice.  It's also nice that big producers like Agnico-Eagle and IAMGOLD are backing Alexandria as part owners.  Let's see if a future set of 43-101 reports on 2P reserves justifies those big firms' interest in these properties.

Full disclosure:  No position in Alexandria Minerals at this time.