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Posts tagged ‘Sunridge Gold Corp. (SGC)’

The golden Horn of Africa

March 7th, 2013

Sunridge, Nevsun, Chalice drill Eritrean gold, copper, zinc, silver

by Greg Klein

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While continuing the Asmara feasibility study in Eritrea, Sunridge Gold TSXV:SGC announced on March 7 a new near-surface discovery at Kodadu, four kilometres east of Asmara’s Debarwa deposit. With assays complete on 21 reverse-circulation holes, the company now plans an initial resource estimate for the potential deposit.

True widths for the two zones were estimated at about 70%. Some highlights from the gossan zone include:

Sunridge, Nevsun, Chalice drill gold, copper, zinc, silver in Eritrea

Gossan outcrops helped draw Sunridge Gold’s attention
to the Kodadu zones near its Asmara project in Eritrea.

  • 1.71 grams per tonne gold over 51 metres
  • 1.77 g/t over 31 metres
  • 1.66 g/t over 22 metres
  • 1.06 g/t over 32 metres
  • 1.08 g/t over 27 metres
  • 1.05 g/t over 20 metres
  • 1.18 g/t over 17 metres.

The top-most intercepts started at surface while the deepest stopped at a down-hole depth of 51 metres.

Some shear zone highlights include:

  • 1.15 g/t over 33 metres
  • 2.3 g/t over 16 metres
  • 0.99 g/t over 21 metres
  • 0.64 g/t over 15 metres
  • 0.81 g/t over 11 metres
  • 1.19 g/t over 1 metre.

Again, the top-most interval began at surface. The deepest ended at 79 metres down hole.

The company now wants to “rapidly define a resource that could be mined as feed” to a processing facility near Asmara’s Emba Derho copper-zinc-gold-silver deposit, 25 kilometres away, which would also serve three nearby satellite deposits. Three of Asmara’s four deposits would be open pit operations. The fourth, Adi Nefas, would go underground.

Asmara’s feasibility study is slated for Q2 release and already the company is forecasting improvements to last May’s pre-feas. Using a 10% discount rate, that study projected a pre-tax net present value of $555 million and a 27% internal rate of return. With initial capital costs then estimated at $489 million, payback would have come in 3.5 years, while the life of mine would last 15.25 years.

Now Sunridge is considering a staged start-up to cut capex and get to the ore earlier. Mining would begin with copper, gold and silver from Debarwa’s supergene (higher-grade) zone. Work would progress with heap leach gold production at the Emba Derho plant, processing ore from the Debarwa and Gupo deposits as well as Emba Derho. The next stage would involve mining and processing the remaining copper supergene ore from Debarwa and Emba Derho. With full production in year three, Asmara would produce an estimated annual average of 70 million pounds (31,750 tonnes) copper, 140 million pounds (63,500 tonnes) zinc, 31,000 ounces gold and 997,000 ounces silver over the mine’s first eight years.

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August 24th, 2012

August 23, 2012

By Kevin Michael Grace

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Gold was up (at press time) $55.40 (+3.4%) for the week to $1,672.10, and silver was up $2.33 (+8.3%) to $30.56. GoldCore attributed gold’s rise to “minutes from the US Federal Reserve meeting convinc[ing]d market participants that QE3 is imminent.”

QE3 is a “done deal,” Bill Gross of Pimco told CNBC August 23. “What the Fed minutes told us is additional easing might be warranted ‘fairly soon’ unless the incoming data pointed to a sustainable strengthening of the economy… I think we need to see months of 3% or better gross domestic product growth before the Fed backs off that particular provision.” And that doesn’t seem likely. How much quantitative easing can we expect? Gross predicts “a relative[ly] open-ended program in terms of size, in terms of time and in terms of what the asset classes is they buy.”

Ambrose Evans-Pritchard reports August 23 that Paul Ashworth of Capital Economics also used the phrase “done deal,” explaining that “little is likely to change between now and the next Fed meeting.” Evans-Pritchard notes, “The shift in Fed policy caught markets by surprise and comes after the European Central Bank’s chief Mario Draghi opened the door to potentially ‘unlimited’ purchases of Italian and Spanish bonds to prevent a Euro breakup. The most radical moves appear likely from China where the managed ‘soft-landing’ risks spinning out of control, with exports contracting on a month-to-month basis over the summer.”

August 23, 2012

Old Faithful: AKA Ben Bernanke.

Mike Shedlock cites August 21 the “increasing isolation of [Bundesbank President Jens] Weidmann, up to the point of open ridicule by the president and vice-president of the ECB,” confirming that “The ECB printing press door is open.” He asks, “How much [will] gold and silver rise in response?”

So, even before we’ve heard from China, we have “open-ended” quantitative easing from America, and “unlimited” quantitative easing from Europe. Forget about money being dropped from helicopters, we’re talking about geysers of money—likely the greatest-ever dilution in the value of paper currency. Which, given past performance, should result in gold and silver rising rather a lot.

And given the failure of all QE efforts since 2008 to arrest what bids fair to become an economic death spiral, we could be witnessing the final furious attempt of the global elite to prevent a long-delayed reckoning.

At the Le Metropole Cafe, Bill Murphy of GATA writes, “Gold has blown through $1,650 key resistance at $1,661 at the moment and silver has broken through its key $30 resistance. This is mega, as you have heard me pound the table on of late.” He goes on to enthuse about “the fortunes which will be made by the coming gold/silver share explosion, which will rival and surpass the Internet craze.”

The most extravagant expression of golden exuberance comes from Egon von Greyerz, managing partner of Matterhorn Asset Management. He tells King World News August 23, “This is going to be one of the fastest moves that we’ve seen in this bull market. We are now talking about gold moving, without any major correction, to the next major target of $4,500 to $5,000. That might seem incredible, but it’s reality. This is a technical target.”

Greyerz says that silver “is going to move a lot faster than gold. The same technical target for silver is $150. That would move the gold/silver ratio down to 30/1. This is the type of move that is hard for investors to comprehend, but this will happen because we have had an energy building up in these markets for almost a year. The release of this energy is going to unleash a massive move. This is not surprising because the destruction of paper money is continuing. Because the money printing is going to accelerate so much in the future, paper currencies are going to reach their intrinsic value, which is zero. We are well under way to that becoming a reality.”

Greyerz concludes, “As this move progresses we will see gold advance well over $100 a day. We will also see silver moving several dollars a day. So this will be relentless. I would just add that many of the junior mining shares are likely to have absolutely massive moves to the upside because they are so cheap and so oversold.”

It would be easy enough to write off this excitement as typical goldbuggery, but the next few months will, if nothing else, certainly test the hypothesis advanced consistently in this space. If the global economic system is fundamentally flawed, and if the US dollar will become so debased that it can no longer function as the safe haven, then capital must flow elsewhere. And if not precious metals, then where?

Stock Tips and Joke of the Week

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Auguries—Original Gangstas

July 5th, 2012

July 5, 2012

By Kevin Michael Grace

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Gold was up (at press time) $52.20 (+3.4%) for the week to $1,604.30, and silver was up $1.38 (+5.2%) to $27.67. Reuters attributed the increase to “increasingly poor economic data rais[ing] expectations that leading central banks will ease policy further to stimulate growth.”

The Bank of England announced a further £50 billion in quantitative easing Thursday, but gold fell $17.50 in response, which was blamed on the European Central Bank having “cut the main refinancing rate to record low of 0.75%.” According to Goldcore, “Analysts from Standard Bank in London say that a rate cut implies a lower real interest rate, which ultimately is bullish for gold.”

Further bullishness is indicated by the extraordinary events in London, where shamed former Barclays chief Bob Diamond testified before Parliament, a performance so graceless he will, in the words of Matt Taibbi of Rolling Stone, “likely now replace Jamie Dimon (who replaced Lloyd Blankfein, who replaced Angelo Mozilo, etc) as the reigning hateable-white-guy Face of World Financial Corruption.”

July 5, 2012

Las Vegas Mob Museum: Pikers compared to Wall Street and the City.

In advance of his testimony, Barclays released a 2008 email demonstrating that it had been coerced into manipulating Libor rates by the Bank of England, at the behest of Whitehall, ie, the British government, which implied it was high time Barclays joined the winning team.

Strangely enough, Diamond denied that pressure had been applied by the Bank of England and Whitehall, despite the evidence. Writing before the testimony, Taibbi suggested that Diamond would “have a difficult time, if this whole thing comes down to a test of his public credibility,” which is one explanation for his memory lapse. Another is that he remained true to the Gangsta Code: Stop Snitchin’.

The Daily Mail reports that Diamond is a fan of a former real-life banger who has since amassed a $450-million fortune peddling murderous fantasies to the white middle class: Jay Z. Diamond is pictured with his lovely daughter, Nell, at a private box at a 2011 concert by the “99 Problems” rapper making the “diamond” sign emblematic of Roc-A-Feller (sic) Records. Princeton-educated Nell, already at 23 an analyst for Deutsche Bank, reacted to her father’s dishonour with a tweet telling Chancellor George Osborne and Labour leader Ed Milliband to “go ahead and #HMD.” (A foul oath that won’t be repeated here.) What’s bred in the bone…

Alex Brummer declares that Diamond’s downfall marks “the downfall of genteel banking.” Brummer compares Barclays’ corrupt Protium scheme to “the scene in the gangster movie Goodfellas where the Robert de Niro character warns his fellow hoods to stash the money until it is safe so as not to attract the attention of the Feds.”

These days it’s hard to tell the hoods without a scorecard. Jay Z admires the Rockefeller name because he sees gangsta in it, while Bob Diamond and his insouciant scion admire gangsta Jay Z presumably because he’s richer than they are and has set the gold standard for bling. As for gentility, that and $16 will get you a glass of orange juice at the Savoy. And the would-be coppers are either bought off or part of the scam.

Nevertheless, the “rig is up,” says Jim Sinclair. “The Bank of England turning their backs on Barclays, the company who did their bidding, will be the event in time marking the trend change.” In other words, the gold and silver cartel is finished. “The paper trail is there. The worm has turned. Even more importantly is that this fight in the $1,540 gold price area was not for regaining the old high in gold. The six attempts to kill gold, supported by some gold writers looking for favours from the riggers was a now failed attempt to keep gold from trading above $3,500. The battle to stop gold has been lost.” He concludes, “I write this with total intellectual and spiritual certainty.”

Elsewhere, Ben Davies of Hinde Capital sees gold going to $4,500 or $6,000, while Dan Amoss at the Daily Reckoning claims, “There’s a plausible path to $10,000-an-ounce gold.”

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Stock Tips and Joke of the Week

Shock Waves

April 30th, 2012

Majescor Flourishes in Post-Quake Haiti

By Ted Niles

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Dan Hachey tells a revealing story. The President/CEO of Majescor Resources TSXV:MJX relates how, “A few weeks ago, an institutional investor came up to us and said, ‘You are the guys working in Haiti? Well, God bless you and good luck,’ and he walked away. That’s what we’ve had to deal with from the beginning on this project.” Haiti has a reputation that’s hard to shake, but Hachey is confident that, paradoxically enough, one of the worst natural disasters of recent years will prove to be the catalyst of a national renaissance.

Haiti is the poorest country in the Americas and has been, over the last century, plagued by a succession of bloody dictatorships, coups d’état and failed attempts at democratic reform. In January 2010, it was traumatized by an earthquake and subsequent cholera outbreak that resulted in the deaths of over 300,000.

Majescor Flourishes in Post-Quake Haiti

Majescor’s SOMINE project: Investment in Haiti and jobs for Haitians

Hachey reports, “The things that I expected are happening. The world wanted to help and provided capital to get things moving there. And the eyes of the world on Haiti [have] forced political change.” He regards the April 2011 election of President Michel “Sweet Micky” Martelly as a turning point. “Martelly has stated that [Haiti] is open for business. We’ve seen a lot of change since he’s been elected.” The Martelly administration has targeted the creation of 500,000 jobs over the next three years and, drawing inspiration from its neighbour, the Dominican Republic, sees big opportunities in tourism and mining.

Hachey says, “Thirty years ago there was no mining sector to speak of in the Dominican Republic, nor tourism. In that short period of time they’ve seen the development of [Barrick TSX:ABX and Goldcorp's TSX:G] Pueblo Viejo Project, which is one of the world’s largest gold deposits—and is pretty much a neighbour of ours. They’re going to be coming on with production this year.”

Hachey points out that “The mineralization does not stop at the border.” The Massif du Nord Metallogenic Belt stretches diagonally from Haiti’s north through to the southeast of the Dominican Republic, hosting both Pueblo Viejo and Majescor‘s 50-square-kilometre SOMINE copper-silver-gold property (itself surrounded by a number of properties held in joint venture by Eurasian Minerals TSXV:EMX and Newmont Mining TSX:NMC).

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Auguries—Doors Of Perception

April 19th, 2012

April 19, 2012

By Kevin Michael Grace

Gold was down (at press time) $33.60 (-2%) for the week to $1,643, and silver was down $0.57 (-1.8%) to $31.73. Reuters commented, “Gold has lost around $50 an ounce since late February after a strong run of US economic data dashed hopes of further US monetary easing. A recent drop of volume also reflects waning investor interest in the gold trade.”

According to Carlos Perez-Santalla of PVM Futures, “With the perception that the major economies of the world have their affairs under control, precious metals remain under some pressure.” Perception, eh? Is everyone on antidepressants?

We know that IMF chief economist Oliver Blanchard remains unmedicated. He said Tuesday, “Things have quietened down, but there is a very uneasy calm. I have a feeling that at any moment things could get very bad again.”

April 19, 2012

Specifically, in the event of a Eurozone-country default, “It is possible that other Euro area economies would come under severe pressure as well, with a full-blown panic in financial markets. Under these circumstances, a breakup of the Euro area could not be ruled out. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.” In other words, Great Depression II.

Even the Economist, the Keep Calm and Carry On of business publications, is having doubts. New York Bureau Chief Matthew Bishop told the Wall Street Journal Monday that “people have lost faith in the 20th-century religion of government-backed fiat money.” He said he would buy gold but is not allowed to by his employer and recommended investors keep 5% to 10% of their portfolios in the metal.

GoldCore comments, “The Economist magazine has a strong Keynesian bias and has been one of the most antigold publications in the world with many simplistic, unbalanced and ill-informed articles. The publication has suggested on many occasions since 2008 that gold is a bubble…. Indeed, there has often been a suggestion that those who buy gold are irrational ‘goldbugs.’”

GoldCore concludes that Bishop’s “conversion” is “another step towards gold moving from the fringe to the mainstream.”

That’s as may be, but there remains no relief in sight for precious-metals equities. Peter Grandich writes, “It’s about 25 years since I first started speculating (gambling) in the junior resource market, and I can’t recall a stronger sense of dislike, disgust and hopelessness…in this sector than I am seeing and feeling now…. I have not seen such a dire state relative to when gold was well below $300 and it seemed like ‘last one out of juniors turn out the lights.’”

Grandich lists six possible reasons for the perception that gold and silver stocks are simply not worth the bother: regulatory chill, American uninterest, smallness of sector scale, reduction of the hold period on private placements, routinely quick turnover of warrants and quick sales for small profits made possible by low commissions charged by discount brokers.

At Financial Sense, Kathryn Derbes argues, “Right now we are in the middle of a monetary war to return to a sound monetary system. The paper gold pricing system vs the physical holders are on the front lines…. Physical gold is in and going into strong hands. On waterfall price declines in the paper market physical purchases accelerate. We see virtually no selling of physical during times like this.”

This suggests that the rise of perceived gold and silver is a major reason for the eclipse of the juniors. Before ETFs, there were only two ways to invest in precious metals—directly, in bullion, and indirectly, in the companies that find and produce them. Now, money that would have supported gold and silver miners goes into a system easily manipulated. Does anyone doubt that should gold go to $2,500 or $3,000, juniors would no longer be drowning at the bottom of a slough of despond?

A GATA correspondent complains, “It’s increasingly difficult to grit my teeth and hang onto my positions in gold and silver, in the gold and silver exchange-traded funds GLD and SLV and even actual bullion (like American Eagle coins). I fully agree with GATA’s views on bankster manipulation of these markets, but the breakout forecast for the metals has been thwarted for decades, with no lasting loss of bankster control in more than 30 years.”

GATA responds, “The price suppression can continue indefinitely, even forever, as long as enough institutions and individuals who think they’re buying gold and silver purchase only paper claims and never take delivery from the purported sellers and move the metal outside the banking system. Such investment behavior facilitates the infinite increase of imaginary gold, the mechanism of price suppression.”

On the other hand, as the GotGoldReport notes, now that rubbish prognosticator Dennis Gartman has put the boot into junior miners, the worst might be over.

And now to cases. Peter Grandich reports his “six largest personal holdings dollar-wise,” as of April 17. Four are gold stocks: Geologix TSX:GIX, Oromin TSX:OLE, Sunridge TSXV:SGC and Spanish Mountain TSXV:SPA.

At the Financial Post, Peter Koven reports that Michael Curran of RBC Capital Markets maintains a $17 price target on Osisko TSX:OSK (currently $9.62).

At the Globe and Mail, Darcy Keith reports that Chris Lichtenheldt of UBS has cut his price target for Silvercorp TSX:SVM from US$8.50 to US$8 (currently CAN$6.62) and that Rahul Paul of Canaccord Genuity confirms his target of US$13.50 for AuRico Gold TSX:AUQ (currently CAN$8.52).

Reuters reports April 18 that “Gold miner Yukon-Nevada Corp TSX:YNG said it has initiated a strategic review of its operations, which may include a sale of the company, sending its shares up as much as 21%.” Christopher Ecclestone of Hallgarten & Company thinks a “distress sale” of the company likely, with Barrick TSX:ABX and Newmont TSX:NMC “likely contenders.”

At 321Gold, Bob Moriarity declares, “Cash flow is king. If you don’t believe that you may want to look at a two-year chart of Rio Alto TSX:RIO.” He concludes, “They aren’t as cheap as they were when I wrote about them [two years ago], but with over 200,000 ounces of gold a year, they are still probably pretty cheap.”

And at the Gold Report, Vishal Gupta says of Arian Silver’s TSXV:AGQ Mexico Zacatecas project, “I see a lot of potential. The resource could conceivably go from the current 120 million ounces all the way to the 200 million to 250 million ounces range.” He believes “silver is a very undervalued commodity right now,” and “Many of the silver names, including First Majestic Silver Corp TSX:FR, are just starting to come into prominence.”

Finally, we learn from the latest issue of Newsweek that sexual practices once associated with the Marquis de Sade are now entirely conventional—and feminist friendly! More curious than that is their story, “What Obama Can Learn From LBJ.” What might that be? The political advantages of showing your gall bladder scar to photographers, lifting dogs by their ears or holding meetings whilst defecating? Or perhaps Obama needs advice on how to become the most hated man in America. Go on, Newsweek; enlighten us.


February 16th, 2012

February 16, 2012

By Kevin Michael Grace

Gold was down (at press time) $1.20 (-0.1%) for the week to $1,730.10, and silver was down $0.40 (-1.2%) to $33.52. According to our favourite wire service, gold remains dependent on the Euro, which isn’t looking too good “after European officials postponed a decision on a bailout package for Greece, which fuelled fears the heavily indebted nation could face a chaotic default.”

This space remains highly sceptical regarding this magical power attributed to the Euro. In any event, we should see a clarification shortly, as the Greek bailout is a busted flush. At best. At worst, it is Germany dealing from the bottom of the deck. According to a website called The Slog, “A written document giving firm dates and detailed actions for a planned Greek default has been in the possession of two top Wall Street bank currency trading bosses since the second week in January… The plan gives a firm date of March 23 for default to be announced after the close of business.”

February 16, 2012

Karl Denninger comments, “As I have repeatedly said, the problem is not, in the main, Greece. It is that Italy, Portugal, Ireland and perhaps others will demand the same thing when Greece defaults, especially if they ‘get away with it,’ and it is nearly certain (absent armed intervention) that they will. Be ready.”

If these countries default, Club Euro will be smaller and much more exclusive shortly. But the Euro isn’t the big news in gold this week. Warren Buffett is. The soi-disant Oracle of Omaha this week delivered to his shareholders (and Fortune) an encyclical on the subject. Buffett doesn’t like gold, for the same reason the Vicar of Rome doesn’t like contraception: it’s not “procreative.” To wit: “If you own one ounce of gold for an eternity, you will still own one ounce at its end.”

One could respond that that’s precisely the point. As the great Peter Blegvad sings,

Gold would be useless if it didn’t require such
Heartbreak to seek it, to find it and mine it
Things remain precious as long they’re rare
If gold could be found lying round everywhere
It’d be the lowliest of metals, too soft for serious use
Pretty, of course, and warm to the touch
But no longer alluring, when you’ve handled so much

Buffett believes goldbugs are scaredy-cats, and, “What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As ‘bandwagon’ investors join any party, they create their own truth—for a while… But bubbles blown large enough inevitably pop.”

Perhaps so, but “inevitably” can mean a long time. Gold traded at $37 an ounce in 1970, while the Dow Jones was at 839. Based on today’s closing prices, the Dow is worth 15.4 times as much, but gold is worth 46.8 times as much.

A rather nice rate of return, but what would Buffett have us invest in instead? His prefers “productive assets, whether businesses, farms or real estate.” Real estate? Is he having us on? In procreative terms, houses are more barren than gold, which doesn’t need constant and expensive maintenance to prevent it from literally falling apart. As for businesses, some are productive, and some are not. It would be hard to argue that the Bank of America (as currently constituted) is a productive asset, but, as Auguries readers will remember, that didn’t stop Buffett from a making a substantial investment (read: sweetheart deal) in that institution last year.

Few will remember that Buffet delivered a pretty much identical encyclical last year (when gold was at $1,440) and was treated with the same fawning reverence. Why, he’s so sagacious and just-plain-folks, sort of a Mayor Tommy Shanks of the financial world. Practically a saint, really—who just happens to be the richest man in the world. And to paraphrase The Simpsons, “No one who invests $5 billion in Goldman Sachs in 2008 could be an evil man.”

Buffett, like all good men, is a stalwart supporter of President Obama and has raised a great deal of money toward his re-election. And of course this had nothing do with Obama’s rejection of the Keystone Pipeline. That Buffett, through his ownership of Burlington Northern, stands to benefit greatly by this is the purest coincidence, a happy accident, if you will.

Buffett is, above all, a patriot, as proved by his November 16, 2010, letter to Uncle Sam (reprinted in the New York Times), wherein he remembers 2008, “the darkest of days,” when “Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch.” Buffett confesses, “And though I never voted for George W Bush, I give him great credit for leading, even as Congress postured and squabbled.” How admirably bipartisan of him and unexpected, too, especially as President Obama’s policy of bailouts for the 1% is exactly the same as President Bush’s.

Ultimately, Buffett is the standard bearer for the mutant capitalism whose hegemony over the world economy is coming to an end, first in Europe, then everywhere else. He says gold is a bad investment, but he would say that, wouldn’t he?

Will gold equities remain bad investments? In the Financial Post, Peter Koven writes, “Half-a-dozen large-cap gold miners are set to announce record profits for 2011, but investors are far from excited about their prospects. Despite gold prices above $1,700 an ounce, miners are struggling with soaring costs, execution problems and country risks. As a result, their stock prices have underperformed gold bullion despite the massive cash flows they are generating.”

Further to this, the Globe and Mail‘s Simon Avery reports that, despite a record-breaking 4Q, “Investors continue to value Barrick TSX:ABX at a price-to-earnings multiple far less than telecom companies and only a hair above most major US banks.” Which suggests that the market is simply prejudiced.

And now to cases. At Seeking Alpha, Vatalyst presents “five silver stocks, all with stories for generally positive outlooks, which could be profitable in 2012 [and] present a great entry point for investors looking to get into the silver market”: First Majestic TSX:FR, Silvercorp TSX:SVM, Silver Standard TSX:SSO, Coeur d’Alene TSX:CDM and Endeavour TSX:EDR.

From the same source, Simit Patel is quite keen on gold miners Nevsun TSX:NSU (especially after its recent fall in price) and Sunridge TSX:SGC. Yes, they are both in Eritrea, but Patel considers this a benefit, not a cost: “The country has been sanctioned by the UN, and so there is fear that it is economically cut off from the world at large. But I believe these fears are unfounded; China is a major supporter of Eritrea, and so I think from a geopolitical perspective, Eritrea is part of the value network that China runs. As I’ve noted numerous times…I believe China is the smart money of the global economy at large and particularly the resource sector.”

And at the Gold Report, newsletter publisher Sascha Opel touts European gold miners Carpathian TSX:CPN, Colt TSXV:GTP, Orex TSXV:REX and Astur TSXV:AST. He suggests “two potential takeovers in 2012″: Mansfield TSXV:MDR and Rye Patch TSXV:RPM.

Finally, controversy rages in New Jersey, where Governor Chris Christie will honour the late Whitney Houston by lowering state flags to half mast Saturday. In defence of his decision, Christie admitted that Houston was “not a role model” but noted that she was “a daughter of New Jersey” and claimed her as a “cultural icon in the history of this state.” This is good news for Garden Staters Deena, JWoww, the Situation, Pauly D and Snooki, cast members of the culturally iconic Jersey Shore, who will doubtless all succumb to tragic vodka and Valtrex overdoses sometime during the Christie administration.

Sunridge Reports 1B lbs Copper, 2.1B lbs Zinc in Eritrea

February 6th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningSunridge Gold Corp TSXV:SGC announced an updated NI 43-101 resource update for the Emba Derho, Adi Nefas and Gupo deposits of its Asmara Project in Eritrea, East Africa. The project is estimated to have measured and indicated resources of 1 billion pounds copper, 2.1 billion pounds zinc, 506,000 ounces gold and 18.6 million ounces silver.

President/CEO Michael Hopley said, “This new resource estimate exceeds expectations; Emba Derho now contains 1 billion pounds of copper and over 2 billion pounds of zinc along with significant amounts of gold and silver in the measured and indicated resource categories. Because of the exceptionally clean metallurgy and amenable shape of the deposit for open-pit mining, we expect that most of these resources will be converted to reserves with the completion of the pre-feasibility study in April.”

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Greg Davis
VP Business Development

by Ted Niles

Grandich on 2011

December 21st, 2011

A December 16 interview

By Kevin Michael Grace

Q: So tell me, to what do you attribute the hammering gold took the last week?

A: I think we saw technical selling which was exaggerated by year-end trading, where when people looked around there weren’t a lot of things they could sell that had profits, and gold was one of them. The physical market remained very strong. In fact, a lot of people spoke about premiums expanding on purchase. There’s people talking about central banking intervention and all that; that’s just more sour grapes than anything else.

Q: Everyone is talking about the 200-day moving average being breached.

A: The thing about that, Kevin, is that that it is an important issue for a pure technician. The problem is that it’s been broken at least a half a dozen times in this bull run starting at $400, and that didn’t end up stopping the market from driving much higher later on. I think it’s an important thing to look at for the short term and even intermediate, but I don’t think it’s something that overrides the bullish fundamentals in that market. I won’t lose sleep over it.

A December 16 interview

Q: How low could gold go in the short term?

A: I think support is about $1,530 in gold and $26 in silver. They can still be tested and maybe be broken briefly, but I think that’s the downside risk for the short term.

Q: I keep hearing about this liquidity problem, but the Dow has done pretty well. Where do these losses come from?

A: I think there’s been an over-exaggeration of how dire things were. I think it was more fluctuating positioning than an enormous number of people suffering dramatic losses. That’s why the US stock market wasn’t shorted.

Q: We’ve heard prophecies of doom with regard to Europe for several months now. Have the markets discounted this already?

A: People do get conditioned to it. That doesn’t mean that if the dire things happen, that it’s all going to be well and good. I am not one of those anticipating a total collapse of the markets.

Q: The US dollar is now the “safe haven.” But if you take the American federal debt and add it to the State and municipal debt, it would seem the US is worse off than Europe.

A: It’s worse. Europe is just the opening act; the real problem will come when it hits the shores in America. In terms of a safe haven, the lows on the US dollar index was around 70, we’re at 80; so we’re talking about a market that’s about only 15% up from its multi-decade lows. I don’t know how you consider that a safe haven. I just think the acuteness of the moment has made the Euro very weak versus the dollar. I don’t consider it a safe haven at all.

Q: Do you think that in the future physical trading of gold could become more important in determining price than paper trading?

A: I like to hope that would be the case because I do concur that there’s two distinct markets and that the paper market has not truly represented what takes place in physical. The good news has been that the manipulation and pressures from the paper market would last for sometimes months or even years, but now they have a diminishing effect that sometimes only lasts for hours or days, and the physical market and its internal strength reverses these negative influences.

Q: It seems like everything I learned as a young man about capitalism is no longer true. For instance, how it is possible to determine the price of gold when paper trades are leveraged at 100:1, and we don’t know how much gold exists?

A: That’s part of Jim Sinclair’s argument. I think you have to look at the whole financial arena. When you think of what just happened a few years ago [in 2008], expecting anything to be fair or reasonable is foolhardy. The financial industry effectively sold tens of billions of dollars of bad cars they knew were going to crash, and then bought life insurance on the drivers. That industry is around and still leading. These people are doing things that are unimaginable in the history of finance. I know the mainstream media doesn’t like hearing that, but they’ve been the goats and the patsies. I don’t know anybody that’s gone to jail over this.

Q: Why isn’t Jon Corzine, as the English expression has it, “assisting police with their inquiries”?

A: Where is the uproar over this? Where are the press conferences demanding there be a special prosecutor looking into this thing? That’s the sadness of where we are today. Believe it or not that’s one of the reasons the most dire goldbugs have predicted $5,000, $10,000 dollars an ounce. When it all comes unglued, nothing on paper is going to be worth anything, in their view.

Q: After 2008, we were told there was more than $10 trillion in counter-party obligations. Three years later, nothing has been done about this.

A: There was a determination we’re not going to look at it. We’re just kicking the can. CNBC and all the rest of the media are just not going to cover this. Thankfully, with the Internet people can learn about this and have a voice.

Q: Perhaps I’m a terribly cynical person, but I no longer believe government statistics. For example, where I live, the price of a loaf of bread has increased 60% in seven years. Yet, supposedly, inflation isn’t a problem.

A: Most people don’t believe the claim of 2% inflation, but they can’t do much about it; they can just try and live with it. As consumers we can look at all our bills; our food and clothing is much more than that. That’s why bonds are the most horrific investment anyone can make, worse than stocks right now. To give our money away at 2% for 10 years or 3% to 4% for 30 years when we all know that it’s costing us already that much more… The people that make the laws, it’s in their interest not to have the real truth come out.

It is unfathomable to look at metal prices, even after this correction, and then look at the valuations that have been placed on mining shares —Peter Grandich

Q: I wonder if that’s a problem with democracy. Bloomberg reported that the US government fought against revealing that it gave $13 billion in secret loans to the banks, but it seems that people would rather watch the Kardashians instead of thinking about the implications of this.

A: Reality television is a great symbol of how bad things have gotten. People don’t want to face reality, so they watch TV shows and dream that their lives can be that way. There are shows now where people are benefiting from other people’s misfortunes, like Storage Wars. Or these shows about pawn shops; this is the whole unravelling of the fabric of how life used to be lived.

Q: Tell me about your $1-million offer. [Grandich put $1 million in a bank to backstop an open bet that gold would reach $2,000 before it reached $1,000.]

A: The media just loves to wheel out the bearish viewers of gold any chance it gets, and of course during the height of the decline they were all brought ought, including the worst forecaster of them all, Jon Nadler. I said enough is enough, and we really need to put our money where our mouth is. I was pleasantly surprised at the manner in which Dennis Gartman conducted himself with me. He took the high road, but I wasn’t surprised to see Nadler and Jeff Christian’s comments. For Nadler to say at MarketWatch that he’s been an advocate of gold, urging as a core holding and has only tried to temper people when they’ve gotten overly bullish is the biggest lie I’ve heard stated in the gold market. We’ll see now if the gold market recovers, whether some of the appeal of Nadler, Gartman and Christian as commentators will be lost.

Q: Gold producers have this year been making a profit of $800 to $1,000 dollars per ounce. I look at their share prices and find them inexplicable.

A: Probably in a few weeks I will write something saying this is the year for juniors. And I’ll have to cross out the numbers 2006, 2007, 2008, 2009, etc, because every year I’ve said the same thing. It is unfathomable to look at metal prices, even after this correction, and then look at the valuations that have been placed on mining shares. It is unthinkable that 10 or 15 years ago, when metals were one-fifth or one-tenth of where they are now, that we would have thought that prices would increase to this level, and the shares would not come remotely close to reflecting that.

Q: If, as it appears, you can actually make money with a gold grade of 0.2 grams per tonne, you kind of think gold would sell itself.

A: You would, but we must remember that even to this day if you take the total market cap of all the major producers they don’t equal things like IBM. It’s still a rather small part of the overall investment portfolios for people around the world. We live it and breathe it each day, but to the bottom line of people in general it isn’t as critical. For Canadians, it’s frustrating because it’s really second nature for you. Here in America, the only thing people know about natural resources is they wonder if there enough gas so I can drive my car around.

A December 16 interview

Q: Do you think there any particular stocks that will do well in 2012?

A: I don’t think people have recognized yet how strong this developing iron-ore play in Quebec is. There are companies I work with like Alderon TSX:ADV and Cap-Ex Ventures TSX:CEV that are really advancing up the corporate ladder and had tremendous years in 2011. Then there are companies that make no sense in terms of how advanced their projects are versus their market caps. I can think of no better story that meets that criterion than Sunridge Gold TSX:SGC. In the next three to six months, we’re going to see prefeasibilities and final feasibilities on multiple projects of theirs that are going to make their net asset value multiple times more than their total market cap. If I had to pick one stock whose price is totally out of whack, that’s Sunridge. Why is that? A significant part is where they operate, in Eritrea. Despite it being actually a very good place to operate, the perception is still very bad. If that starts to change a little, and they continue to have great success as they have on the corporate front, we could see a dramatic re-evaluation of their stock.

Q: I’m very interested in this because the Canadian media has been very hostile to Eritrea.

A: What happened was this little country, Gabon, which is on the other side of Africa, was about to lose its seat on the Security Council, and they leaked this story they were about to force everything to stop in Eritrea. One of the things that’s going to change this story is you’re going to see the Chinese announce an acquisition in Eritrea. There’s a current company out there that won’t say who it’s involved with, but it’s in talks with a major partner. The Chinese have been in Eritrea sniffing around; they’ve looked at Nevsun TSX:NSU and Sunridge and others. Once the Chinese take a foothold in the country, all that crap in the UN will come to a halt, because they’re the next big thing economically. The worst in Eritrea is going to be behind us.

Peter Grandich is the founder of and Grandich Publications, LLC, and is editor of The Grandich Letter, first published in 1984. Grandich Publications, Inc. provides research, analysis, and investor relation services for certain of the companies featured in the articles appearing in its publications. Grandich is the author of Confessions of a Wall Street Whiz Kid, which Kevin Michael Grace reviewed here.

Sunridge reports Eritrea Results up to 6.09 g/t Gold over 30m

December 6th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningSunridge Gold Corp TSXV:SGC announced assays from the Gupo Gold Deposit of its Asmara Project in Eritrea. Results include

6.09 g/t gold over 30 metres
6.2 g/t over 19 metres
4.13 g/t over 12 metres
3.66 g/t over 13 metres
5.19 g/t over 7 metres
2.46 g/t over 13 metres
2.79 g/t over 9 metres
1.44 g/t over 16 metres

The Gupo Gold Deposit has an inferred resource estimate of 1.96 million tonnes grading 2.99 g/t gold for 189,000 gold ounces.

View Company Profile

Greg Davis
VP of Development

by Greg Klein

Sunridge VP Greg Davis on Eritrea gold assays of 6.56 g/t over 12m

November 7th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningSunridge Gold Corp TSXV:SGC announced results from the Gupo gold deposit of its Asmara project, Eritrea. Assays include

2.38 g/t gold over 27 metres
6.56 g/t over 12 metres (including 18.05 g/t over 4 metres)
2.54 g/t over 14 metres
6.36 g/t over 12 metres
2.35 g/t over 15 metres

The Gupo deposit has NI 43-101 inferred resources of 189,000 ounces gold. The current drill program is designed to upgrade inferred resources to the measured and indicated categories as part of the ongoing prefeasibility study on the Asmara North deposits.

VP of Business Development Greg Davis tells, “We released our first batch of assays from the almost-complete 7,000-metre drill program on the Gupo Gold Deposit of the Asmara Project in Eritrea. There’s an inferred resource on the deposit, and this program is designed as part of the prefeasibility study on Asmara North, which includes Gupo, to upgrade the resource to indicated. We did a program last spring; we’re doing another one now; and we also see an opportunity to expand the resource. These are the first 16 holes, and there’ll be more results about every two weeks now.

The prefeas study is on schedule for completion in March. We’ll have full bankable feasibility on Debarwa [at the south end of Asmara], which is now expected for early 2012—Greg Davis

“We’re quite encouraged by the first batch because it’s from the north end of the deposit, and those are fairly significant gold grades and intercepts, and there may be an opportunity to expand the resource to the north as well.

“Most of Asmara remains unexplored.” he adds. “Between 2004 and about 2007, we did a lot of exploration on Asmara for VMS targets, and we had a lot of success, but we haven’t really explored much for VMS targets in the last few years. We’ve been working on advancing our current deposits towards production, so that’s taken up all our resources in terms of cash, drills and personnel. But we’re trying to get back to what we do best—exploration—in January 2012. We’ll get back to exploration drilling on new VMS targets, and we do expect success.

“The updated Gupo resource will come out probably in early January 2012. We’re still drilling right now, but we’re almost complete. The prefeas study is on schedule for completion in March,” Davis says. “We’ll have full bankable feasibility on Debarwa [at the south end of Asmara], which is now expected for early 2012.

“We’ll complete our bankable feasibility and our socio-economic impact assessment report, submit them to the ministry of mines and apply for a mining licence. We expect that review process to take up to six months. Actual construction could begin in 2013.

“I’ve been involved in Eritrea now for nine years,” he points out. “There’s five of us on our team who have previously worked with Nevsun [TSX:NSU], so we’ve got a lot of experience in the country, and everybody loves it. It’s a unique place, and it’s really a pleasure to work there. We’ve got full support from all levels of government and the people. It really is a great place to operate.

“We also drilled a program in Madagascar during the North American summer, and we should have the assays back any day now. That was our first drill program there, so it’s really wait and see.,” Davis says.

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Greg Davis
VP Business Development

by Greg Klein and Ted Niles