ASIA BROADBAND ORD (OTCMKTS:AABB) is an interesting play on the theme of a resurgence in Chinese infrastructure growth following signals from Beijing that huge stimulus measures are set to take effect in China. In addition, the company recently announced it has signed a definitive joint venture agreement for the large scale expansion of the Company’s mining operations in the state of Guerrero, Mexico, with Qiangda Investments & Economics & Co., Ltd.
According to the release, “The agreement guarantees a $34 million capital commitment allocated over a 3 year period on a time-lined payment schedule to earn-in a maximum 40% equity interest in the Company. The schedule consists of a $5 million initial payment that has now been received earning a 6% equity interest, a $9 million minimum payment in 2019 to earn a further 10% interest, a $10 million minimum payment in 2020 to earn a further 12% interest and a $10 million minimum payment in 2021 to earn a further 12% interest.”
ASIA BROADBAND ORD (OTCMKTS:AABB) frames itself as a company that, through its wholly owned subsidiary Asia Metals Inc., is a resource company focused on the production, supply and sale of precious and base metals, primarily to Asian markets.
The company generated sales of $1.1M, according to information released in its most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 10% on the top line.
This is possibly the most interesting of the lot simply because it presents such a deep value option with so much potential upside.
The Company utilizes its specific geographic expertise, experience and extensive industry contacts to facilitate its innovative distribution process from the production and supply of precious and base metals in Guerrero, Mexico, to our client sales networks in Asia.
This vertical integration approach to sales transactions is the unique strength of Asia Broadband and differentiates the Company to its shareholders.
Asia Broadband, Inc. operates as a digital education media and technology services company. It offers classroom based education services; and content services on Internet broadband network in the People’s Republic of China. The company was formerly known as Gemini Marketing, Inc. Asia Broadband, Inc. was incorporated in 1996 and is based in Las Vegas, Nevada.
In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.4M against $66K).
A Rising Tide
As noted above, the company just announced it has signed a definitive joint venture agreement for the large scale expansion of the Company’s mining operations in the state of Guerrero, Mexico, with Qiangda Investments & Economics & Co., Ltd.
The joint venture capital will be allocated specifically to expand the identified resources within the Asia Broadband properties and build out a new production processing facility with greater efficiency and capacity, but also includes provisions for new exploration expenditures. The operating terms include identifying Asian Metals Inc. as the manager of the joint venture and the forming of a management committee with representatives from both parties to oversee, approve and direct budgeting, capital expenditures and decision-making regarding operational processes and expenditures.
“We are exuberant at this point. The diligent work by everyone in the Company over the past 4 months has resulted in us reaching our most significant milestone to date. With a major source of committed capital backing our facilities and drill program expansions, many more milestones will be reached as we continue to grow going forward,” declared James Gilbert, the Company President and CEO.
AABB shares recently pulled back to successfully test support at a bullish and rising 200-day simple moving average. The stock has been running higher over recent months. A move back above the nickel per share level would potentially represent a major signal of open skies above for bulls.