PDAC

Analyst and Chief Commentator Peter Grandich from Agoracom was invited to comment on small cap mining stocks by BNN Market Call during the PDAC 2010 Mining Conference in Toronto.

He said the market is overreacting and the share price of mining companies in Eritrea is undervalued as a consequence of negative media coverage.

This overshadows some of the progress being made by mining companies such as Sunridge Gold and Nevsun Resources in Eritrea.

Nevsun, for instance, has completed its non-brokered private placement financing and is planning to go into production in late 2010 despite all the dramatic ups and downs in recent years.

Grandich believes that the worst of the bad news is behind them and that better days lie ahead, unless further tidal waves of bad press will continue to dominate the media.

He says that the UN has adopted sanctions not against the country as a whole, but against certain politicians and the military in Eritrea. He will update his rating on Nevsun and Sunridge Gold later this month after the UN has announced its decision, whether it is going to continue, increase or remove the sanctions on Eritrea.

“If Sunridge’s projects would be somewhere else in the world it probably would be three to four times the price of today.

Its being penalized for being there, but if you are a believer like me eventually things will get better and they should be doing well in the long run,” says Grandich.

When he was asked to rate Eritrea on a risk scale against other places in the world he replied,

“You have to put it to the most riskiest when the UN has brought sanctions against them, but the good thing is the likelyhood of things getting better is high as things cannot get much worse.”

Experts believe the fact that Nevsun Resources managed to solve the question of financing will remove most of the fears that came from the UN sanctions against Eritrea.

Watch the episode on http://watch.bnn.ca/market-call/march-2010/market-call-march-9-2010/#clip274281

Top Picks

Chief Market Commentator, Peter Grandich, recommended Nevsun Resources (TSX/AMEX:NSU) on BNN Market Call. Peter Grandich is one of the most widely followed precious metals analyst in the world and the second analyst after Brent Cook to suggest Nevsun Resources on BNN Market Call.

According to Peter Grandich the company is one of the “soon to be” cheapest mining companies in the world. He points out that the Bisha Project is a monster deposit in Eritrea and within 18-24 months the production that will come from the mostly gold part will pay for all the debt and cover future exploration costs.

The Chief Analyst believes that Nevsun Resources is a future prime takeover candidate which is worth a lot more than its current stock market value. When asked about a potential buyer he mentions Anglo Gold Ashanti which has mining interests in Africa. Recent changes to the management and the fact that Nevsun Resources has not an entrenched management team makes the company even more vulnerable to takeovers says the analyst.

Peter Grandich has mentioned many times before that Nevsun Resources is a potential takeover candidate. This makes the Nevsun share even more attractive to possible investors.

Watch the program with Peter Grandich here: BNN Market Call Top Picks

Peter Grandich was the founder and managing member of Grandich Publications which published The Grandich Letter since 1984. His commentary on the mining and metals markets have been read by tens of thousands of subscribers and relied upon by major financial media around the world. In October 2008, Agoracom: Small Cap Investment was acquired by AGORACOM.com and Peter Grandich was appointed Chief Commentator.