Raiden Resources (ASX: RDN) is up another 28% on the back of sampling results. Those results are good, there’s no doubt about that. But they are only sampling results. They’re surface rock chip samples being used to map out the drilling programme. This is thus still very early days in the process of showing that there’s an economic lithium deposit at Andover South. We think there might well be one there, don’t get us wrong. But we do worry that the current valuation - $100 million and change - is rather assuming that instead of waiting and seeing.
Today’s announcement: “Raiden Resources Limited (ASX: RDN DAX: YM4) (“Raiden” or “the Company”) is pleased to announce assay results received from rock chip sampling, as part of the detailed mapping undertaken in September 2023, undertaken in preparation for drill planning, over its Andover South tenements. The results continue to indicate high potential for significant and mineralised Lithium-Tantalum-Caesium (“LCT”) pegmatites.”
OK, decent lithium values there. Which is good - it’s a good indication. But it is still only an indication. These are surface rock chips tested for the Li and spodumene content. Only drilling is going to show both how much of this there is - we need lots for it to be economic - and what the average Li content is, not what the occasional sample shows.
Raiden Resources share price from Google Finance
As we’ve said before about Raiden Resources: “Raiden Resources (ASX: RDN) shares are up 21% today. RDN shares have moved up on the announcement of their drilling results at Andover. Given how many other people are finding lithium in spodumene around Andover (Errawarra, Sabre etc) we’re fine with the idea that they’ve drilled into spodumene occurrences. Even that they contain lithium. We’re entirely willing to entertain the idea that it’s a viable lithium prospect too.
“But there’s one little tell here for us. Something we regard as being so wrong that it casts doubt upon everything else. We agree, this is an extreme view. But it is still one we hold. “
That little tell for us was that Raiden was talking about rubidium as a usefully saleable byproduct. This isn’t so and to us calls into some doubt everything else they’re saying. That might seem to be a trivia to worry about but it is an important insight into their market knowledge.
More generally we agree that there’s lithium at Andover. We’re still not sure about Andover South - we’re holding out for the results of these drilling programmes before we think that is proven.
