Peter Grandich, editor and publisher of The Grandich Letter, believes that we’re in the midst of a stealth gold bull market. Last year he was famously quoted as saying, “The great ‘Bull Run’ won’t end until the price of gold has at least a ‘2’ in the front ($2,000+).”
For that he bets $1 million that gold will hit $2,000 before it hits $1,000 on the Comex.
However, in his exclusive interview with The Gold Report , he further predicts that gold will soon top $2,350 per ounce. (The current market price for an ounce of gold is about $1,720)
It was believed that Peter Grandich was the first extractive industry analyst that puts an end to the confusion and mystery that marred the capital market over who could be the potential acquirer for Chalice’s Eritrea deposit following the company’s intention to sell its 60% stake in its Zara gold deposit. His prediction of a Chinese take over was turned out to be absolute as the subsidiary of the Shanghai Construction Group known as SFECO later confirmed it is acquiring the gold mining asset at a value equal to US$100 million.
This time, when asked by The Gold Report about which of the junior minors that he currently following can act like a catalyst in the gold bull market, he simply puts it that junior African miners Nevsun and Sunridge that both are operating in Eritrea, will be some of the main players in this year’s gold market.
He concluded that Sunridge’s Emba Derho zinc-gold-copper VMS deposit could rival Nevsun’s Bisha gold-copper-zinc VMS deposit, which currently is one of the world’s highest grade open pit base metal deposits.
Below is an excerpt of the interview concerning Nevsun and Sunridge:
The Gold Report: Which of your junior gold equities that you follow have recent news that could act as catalysts?
Peter Grandich: Of all the companies that I am involved with, just about everyone is an undervalued junior because they have multiple, advanced-stage exploration projects in either prefeasibility or feasibility studies. Their values are far more than their market caps. For instance, if Sunridge Gold Corp.’s (TSE:SGC) project wasn’t in Eritrea, this stock would already be many times its current price.
The Gold Report: Wouldn’t it then be taken out?
Peter Grandich: Yes. The market is discounting this project somewhere between 80% and 99% because it’s in Eritrea. However, the country risk is even less than what it was. The U.N. sanctions against the country ended up getting watered down. The Chinese have announced a major investment in Eritrea and are talking about doing more.
It’s extremely good for Sunridge and bullish for the bigger company in Eritrea at the moment, Nevsun Resources Ltd. (NYSE:NSU). I would not put it past Nevsun to acquire it, but I would think Nevsun would wait until Sunridge’s projects are more advanced. Once Sunridge’s studies are in, Nevsun, another company or Sunridge will develop it. It’s close to getting updated resources on multiple projects, so it’s just too compelling.
Even though they’ve moved up somewhat, Sunridge shares are still substantially lower than their 52-week high. This is a key year for Sunridge. It’s gone through tough times. Its stock went down to pennies on the dollar. If it demonstrates what I think it’s going to in these reports, no matter that it’s in Eritrea, it should have a much higher valuation.
Some people that I’ve met who are familiar with Sunridge believe its Emba Derho zinc-gold-copper VMS deposit is bigger than Nevsun’s Bisha project. That says a lot.
The Gold Report: Could Nevsun be taken out by something like Rio Alto Mining Ltd. (CVE:RIO), BHP Billiton Ltd. (NYSE:BHP) or a Chinese company?
Peter Grandich: Both Nevsun and Sunridge could be gobbled up by a bigger company. But Nevsun could also be interested by something that’s worth 5 to 10 times more than its current value with the advantage of being in its own backyard.
Also, Cliff Davis, the chief executive of Nevsun, and the principals of Sunridge go back a long time. They have cooperated on a lot of things. But no matter what happens, Sunridge’s stock is extremely cheap.
Full Coverage of the interview can be found HERE.