The last session on the CVE market will surely remain as the most memorable for Argex. This is eloquently illustrated by the figures that speak for themselves. It was a day full of records for the stock. RGX marched more than 24% up in comparison with the previous close. The price climbed to a record high of $0.730 per share. The trading volume of 4.18M shares has also never been reached in the company’s history before.
The disclosure of the final metallurgical results from Phase One of the test work at La Blanche titanium deposit was probably the main reason for the surge of the shares. Argex announced the production of high purity 99.8% titanium dioxide (TiO2) on the property. As stated, Phase Two test work is also complete and awaiting final report and Phase Three is planned to start in just several days.
In another release from the end of January, Argex announced a prognosis that Titanium Dioxide prices will probably double to the end of 2015.
These good developments, unsurprisingly so, managed to launch the shares high into the sky. The question is, however, for how long. Analysing the company’s financial condition, we could have serious doubts that the future of Argex will be as bright as described.
Perhaps all can be summarized by the following statement written by the company itself in its latest financial report for the third quarter of 2010: “At September 30, 2010, the Company had not yet achieved profitable operations, had no operating income and had working capital of $2.402.821, which may not be sufficient to sustain operations over the next 12 months, and expects to incur further losses in the development of its business”.
It is so clearly said that no further comment is needed. When Argex admits itself it has insufficient funds to finance its operations, everything else, including the TiO2 price, is of much less importance. This could compromise all company efforts and probably make the positive developments from the last month almost useless.
