AXMIN ups resource but shares fall

AXMIN (AXM-T) has upped its resources in the indicated category by 44% at its project in the Central African Republic (CAR).

On Apr. 10, the Toronto-based company announced that the resource at its Passendro Gold Project has been lifted to 1.54 million oz. grading 2.6 grams gold, of which some 77% lies within the oxide zone.

In spite of the positive news, AXMIN shares were down 1.32% or 1 to 75 on roughly 42,000 shares traded.

Total ounces in the inferred category fell slightly to 1.04 million-oz. from 1.1 million oz., however the grading in the category improved to 2 grams gold per tonne from l.8 grams gold per tonne.

Included within the indicated resource is roughly 750,000 oz. in the Katsia and French Camp deposits that have a grading of roughly 3.6 grams gold per tonne.

The Passendro Gold Project is located in the centre of the Bambari greenstone belt within the 100% owned Bambari-Bakala Permits.

Judith Webster, a spokesperson for AXMIN offered that the markets unfamiliarity with CAR may be at play in the markets tentative reaction to the news.

“CAR is an unkown country to the market,” she says. “We’re the only gold explorer in the country.”

Webster went on to say that operating in the country has been smooth. She cited CAR’s recent democratic elections — in the summer of 2005 –, its lack of tribal rivalry and sparsely populated land as factors that distinguish it from its more tumultuous neighbour to the south — the Democratic Republic of Congo.

AXMIN believes such factors combined with the strength of its resource will eventually win the market over.

Meredith says the announced upgrade in indicated resources will make for a more robust pre-feasibility study which should be done by the end of April.

The feasibility study, which began in January 2006, should be finished in early 2007 according to the company. To date only the central 10-km of the 120-km greenstone belt included in AXMIN’s permits have been drill tested.

“As we continue to define resources within the very significant and extensive anomalies around the Passendro Gold Project,” says AXMIN’s chief executive Jonathan Forster in the release, “we expect that the life and size of the development may be substantially increased.”

The revised mineral resource estimate has been based on some 51,000 metres of reverse circulation and 11,000 metres of core drilling.

The company says indicated resources were established from drilling on 40-metre fence spacings to a maximum vertical depth of 120 metres.