##{"id":59851,"date":"2012-04-26T12:26:46","date_gmt":"2012-04-26T02:26:46","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/04\/26\/riedel-offers-west-african-upside\/"},"modified":"2012-04-26T12:26:46","modified_gmt":"2012-04-26T02:26:46","slug":"riedel-offers-west-african-upside","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/04\/26\/riedel-offers-west-african-upside\/","title":{"rendered":"Riedel Offers West African Upside"},"content":{"rendered":"

\n\t – Riedel<\/span> a Spec Buy for West African exposure
\n\t – Region is highly prospective
\n\t – Riedel's<\/span> assets near significant projects
\n\t – Little downside from current levels according to DJ Carmichael<\/strong><\/p>\n

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

\n\tRiedel<\/span> Resources ((RIE<\/span>)) is a junior gold play with a number of prospective projects in West Africa and Burkina Faso. Among these are five permits in Burkina Faso recently acquired from Golden Rim Resources ((GMR<\/span>)), where drilling targets have already been identified.<\/p>\n

\n\tDJ Carmichael rates Riedel<\/span> Resources as a Speculative Buy, in part given the permits acquired from Golden Rim offer favourable<\/span> geology, are close to existing large deposits and have recorded high value geochemical anomalies in soil data.<\/p>\n

\n\tFuture work on the permits will include detailed aeromagnetic<\/span> surveys, mapping of geochemical sampling and trenching and DJ Carmichael expects this should provide positive ongoing news flow for Riedel<\/span> in coming months.<\/p>\n

\n\tThe Marymia<\/span> project in West Africa also offers good potential in the view of DJ Carmichael, as the project falls in the active Doolgunna-Thaduna<\/span> region and is only around 55km<\/span> from the DeGrussa<\/span> project of Sandfire<\/span> Resources ((SFR)) and 12km<\/span> from Sipa's<\/span> ((SRI)) Thaduna<\/span> project. <\/p>\n

\n\tWork to date suggests a number of possibilities, as DJ Carmichael notes Riedel<\/span> has reported a 7km<\/span> long arsenic anomaly and numerous high tenor copper, nickel and arsenic anomalies that will require follow-up drilling work.<\/p>\n

\n\tThe potential on offer in Africa suggests valuation upside for Riedel<\/span> in the view of DJ Carmichael, as the company has an enterprise value of less than $10 million at present. This is despite an estimate of around $6 million in cash post a current capital raising. <\/p>\n

\n\tThe capital raising involves a placement of more than 19 million shares at a price of 11.5c per share, which is a discount to the previous closing price of Riedel<\/span> of 13c<\/span> per share.<\/p>\n

\n\tThe other attraction of Riedel<\/span> for DJ Carmichael is the company offers an early entry opportunity into the West African gold sector. This sector has enjoyed considerable success in recent years and given this the broker sees limited share price downside for Riedel<\/span> from current levels.<\/p>\n

\n\tGiven a market capitalisation<\/span> of only around $6 million prior to the capital raising, Riedel<\/span> receives little coverage in the broader market. The FNArena<\/span> database shows no coverage of the stock from the eight brokers in the database.<\/p>\n

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