citadel sitting pretty - and there's no stop

Article below from SMH. Not really any new news but reiterates the potential of this company.


Citadel sitting pretty - and there's no stop sign
BARRY FITZGERALD
July 21, 2010 - 9:01AM

Citadel Resource Group has come a long way since moving in amongst Saudi Arabia's oil, camels and desert sands in 2003-2004 to see what exploration/development ground it could pick up in response to the kingdom's new mining policy.

We know that because Citadel is now a $700 million company at its last sale price of 29.5 cents a share - a market value that reflects the earnings to come from the end of next year at its $US280 million Jabal Sayid copper/gold project.

But Citadel ain't stopping there. Apart from the good-sized development opportunity at the Jabal Shayban gold deposit (467,000 ounces gold equivalent), the group's trailblazing role in the country means that it has an unrivalled ground position that is set to create new opportunities.

All that became clear back in May when to the surprise of some, a patient Citadel secured the all important mining licence for the development of Jabil Sayid. It demonstrated that the kingdom was serious about developing a modern-era mining industry to give its economy a second leg to oil.

Citadel was excited for sure, the big boys of the industry just as much. The grant of the mining licence meant Citadel had opened up a new hunting ground for them, namely the Arabian Shield, half of which sits in eastern Saudi Arabia before diving under the Red Sea and popping up on the other side.

Its (geologically) old rocks - compared with the younger rocks that host the oil in the east - are home to more than 1000 ancient copper and gold mines, with Jabal Sayid just being a bigger and modern version of the metal-making that has being going on in the region for thousands of years.

Garimpeiro's mates in downtown Jeddah tell him all that means that Citadel is being inundated with inquiries from the big boys of the industry household names in the mining industry was how he put it about the potential to strike joint venture deals with Citadel on its exploration projects in the country.

So while the near-term focus for Citadel is to get Jabal Sayid in to production and advance Jabal Shayban, the potential is there for the company to secure some big-spending joint ventures on some of its exploration properties, some of which have shown world-class potential.

The trouble with world-class potential is that it generally means a 5 to 10-year drilling program and then a couple of billion bucks in development funding, assuming the property in question lives up to its potential.

All the better then if Citadel can lay off some of that cost (and risk) with one of the big boys. There is nothing immediate in all this but it will be worth watching to see just what sort of joint venture deals Citadel does strike as part of its growth ambitions.

What is known is that outside of the Jabil Sayid and Jabal Shayban projects, Citadel's early mover status in Saudi Arabia has allowed it to secure some special ground positions. If they were in Western Australia, they would have already been turned in to Swiss cheese.

Two stand out, the Bari porphyry-style gold project south of Jabal Sayid and Wadi Kamal, an ultramafic sulphide nickel, copper and platinum group metals play not far from the port at Yanbu on the Red Sea.

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