Yesterday, Argex announced the successful completion of technical due diligence which, according to Fadi Benjamin, Analyst at Pope & Company, “Is a significant and critical milestone for the release of funds.” Following the release of yesterday’s news, Pope & Company and Stormcrow Capital released research updates with each, reiterating their recommendations and target prices.

Argex closed Tuesday’s trading at $0.47 on more than 600 thousand shares, up 17.5% from Friday’s close.

Pope & Company – $2.10 target and BUY recommendation
Stormcrow Capital – $2.00 target and Positive recommendation

We quote the following key highlights from the Pope & Co. update:

• Reflecting this thorough and deep level due diligence, we feel confident that the Scale-Up risk has been checked off and is no riskier than an implementation of current technologies, such as the chloride process, by industry incumbents.
• Two teams of external industry experts were engaged by the company’s leading debt and equity financing sponsors to fund $300 million of project CAPEX.
• This process was initiated by the financing consortium with independent industry experts as a prerequisite to funding the Valleyfield plant.
• The technical due diligence is a significant and critical milestone for the release of funds.
• We reiterate our BUY rating and 12 month target of $2.10 for Argex and recommend investors to add to their position in the stock as the most difficult and demanding phase of the project financing has been successfully completed. What remains, legal due diligence, is relatively benign.

We quote the following key highlights from the Stormcrow update:

• The final due diligence reports have been delivered, at long last. At this point, the company considers the diligence phase of the financing process closed, and all parties appear to be prepared to proceed to conclude negotiations and move toward construction.
• We note that while titanium dioxide pigment prices have experienced some price pressure, as have practically all other industrial commodities…this means that, even in this environment, the company (Argex) would generate sizeable cash flows and should therefore prove to be a very solid investment.
• We had hoped for a shorter due diligence path, and that the company would have concluded its construction financing by now, but we are not in any way discouraged from our belief that the company’s technology represents a sea-change in the pigment industry.
• We maintain our $2.00 target price and positive recommendation, as Argex moves toward concluding the terms of debt and equity for its first commercial plant.

Unfortunately, we are not permitted to publish the Pope & Company report online, as it is only available to its clients. To view the Stormcrow Capital update, please click here.

http://howardgroupinc.com/2015/02/pope-company-stormcrow-calling-400-jump-argex-shareprice/