##{"id":59422,"date":"2012-01-30T12:48:20","date_gmt":"2012-01-30T01:48:20","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/01\/30\/exploration-success-beckons-for-nimrodel-resources\/"},"modified":"2012-01-30T12:48:20","modified_gmt":"2012-01-30T01:48:20","slug":"exploration-success-beckons-for-nimrodel-resources","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/01\/30\/exploration-success-beckons-for-nimrodel-resources\/","title":{"rendered":"Exploration Success Beckons For Nimrodel Resources"},"content":{"rendered":"

\n\t – Nimrodel<\/span> returns positive drilling results
\n\t – DJ Carmichael suggests significant increase in resource base is likely
\n\t – Retains Spec Buy rating on valuation upside<\/strong><\/p>\n

\n\tBy Chris Shaw<\/p>\n

\n\tNimrodel<\/span> Resources ((NMR<\/span>)) has a 70% stake in an existing coal resource of 4.2 billion tonnes<\/span> at the Takatokwane<\/span> project in Botswana. A drilling campaign began late last year with a view to lifting this resource via additional discoveries at Takatokwane<\/span> South in particular.<\/p>\n

\n\tDJ Carmichael points out drilling results at Takatokwane<\/span> South to date suggest significant potential for a major resource upgrade. Diamond drilling completed so far has intersected the same seams as found at the Takatokwane<\/span> project, while deeper drilling has also revealed some additional seams.<\/p>\n

\n\tOne highlight of the drilling has been the thickness of the seams encountered. For example, DJ Carmichael notes Seam 2 reached a thickness of up to 21 metres<\/span> and is consistently represented as a thick seam in all drill holes in the area.<\/p>\n

\n\tFollowing drilling results from the first 13 holes of a 16 hole program, Nimrodel<\/span> has set an exploration target of 2.0 billion tonnes<\/span> in additional resources. DJ Carmichael has been more conservative and assumes a 40% yield for this target, which equates to an additional 800 million tonnes<\/span> in JORC<\/span> resources.<\/p>\n

\n\tSuch an assumption suggests a total resource for the combined Takatokwane<\/span> and Takatokwane<\/span> South projects of 3.2 billion tonnes<\/span> on DJ Carmichael's numbers. Given an average for southern African explorers of around 3c<\/span> per tonne<\/span> in terms of Enterprise Value per resource tonne<\/span>, this leads to a total valuation for Nimrodel<\/span> according to DJ Carmichael of $95.7 million.<\/p>\n

\n\tThis equates to 21c<\/span> per share, an increase from the previous valuation of 17c<\/span> per share. Relative to a share price of around 5c<\/span> per share this suggests significant value, leading DJ Carmichael to retain a Speculative Buy rating on the stock.<\/p>\n

\n\tWhat supports the view of potential upside is the likelihood of positive news flow in coming months, as DJ Carmichael points out a scoping study is due for completion near the end of the first quarter of this year. <\/p>\n

\n\tAs well, DJ Carmichael notes Phase II drilling to establish a JORC<\/span> resource at Takatokwane<\/span> South and to determine the nest area in which to define an Indicated Resource leading to a pre-feasibility study will continues through this year. <\/p>\n

\n\tAt present Nimrodel<\/span> Resources has a market capitalisation<\/span> of around $22 million, meaning it slips under the radar in terms of broker coverage. As evidence of this, none of the brokers in the FNArena<\/span> database provide coverage at present.<\/p>\n

\n\tShares in Nimrodel<\/span> today are slightly lower, trading down 0.1c at 5.2c as at 12.05pm. Over the past year the stock has traded in a range of 2c<\/span> to 10c<\/span>.
\n\t <\/p>\n

\n\tFind out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"