On the Radar Screens of the Majors

The Gold Report Interview with Greg McCoach (03/06/2009)
"TGR: Let’s talk about some of the companies on your top 10 list. Pediment Gold Corp. (TSX:PEZ) (OTCBB:PEZGF) is at the top; can you give us an update?

GM: Since they bottomed, Pediment has more than doubled. They’re hanging around the dollar trading range, which some people have been disappointed with. But what I say is, look, Gary Freeman, the CEO, is just weighing his options right now. He’s not making much in the way of news. That’s okay. He’s lying low, he’s looking at his options right now, and this is a company that is about to release a new 43-101 that will have more than 2 million ounces of gold in the ground. This is a verified situation. That’s a significant number because once a company, a junior, crosses the 2 million ounce gold mark, it gets on the radar screens of the majors.

Gary has a lot of things he’s weighing out. After the market meltdown, he decided to reduce costs, get things trimmed down, and get the burn rate really low to conserve cash. So, in the last few months there has not been much in the way of news. The company is lying low for now, but I think you’re going to see that change as PEZ announces their new 43-101 resource calculation. At that point I think you’re going to see Pediment start to have a lot of news flow, which should be very good for the share price.

He’s got the Baja property we just talked about that’s going to have the new 43-101. I don’t see how it’s not at least 2 million ounces based on my back-of-the-envelope calculations, but you never know with these things until they actually come out. I would guess it’s going to be over 2 million and there’s plenty more to be discovered there In my opinion, this deposit could be greater than 3 million ounces before all is said and done. Well, that’s a major discovery. It’s in the right jurisdiction, with very low development costs and it’s in an existing mining area, so it should do very well.

Now, Pediment also has a project called La Colorada that could be a near-term producer. It’s the old open pit that El Dorado Gold Corporation (ELD.TO) (AMEX:EGO) produced from, which really made El Dorado Gold what they are today—what launched them—that discovery and putting it into production. Pediment now controls it and other people are interested in it. Should Gary vend it out to somebody else, take the cash and run, or should he develop it himself? He has lots of options. He has lots of cash. He has lots of great properties. Gary has many different things he can consider at this point, so I think he wisely just stepped back, started to look through everything that he has and what options are available. We’ll see what happens but the prospects for the company look very good..

I’m sure there’s been interest by majors already on the Baja Project. He’s probably gotten plenty of calls, where the majors are already saying, "hey, look, what if we just take you out at this price?" Is it high enough? Is it worth taking the money now and running, letting somebody else deal with it? Or is it better for the company to go down the road a little bit further, develop it themselves in the hopes of getting a much higher price later on? These are things we all have to weigh out. Is it better for us as shareholders to take the money and run right now, even though we might get a lower price for it? Or should we wait a little bit longer, and get a higher price when they develop it? These are things we have to look at. So, with that being said, in my opinion, as we see these higher gold prices and with the news that’s about to come out, I think Pediment’s a two dollar stock in the next six to eight weeks."

For more independent commentary, click here: Pediment Gold Corp.

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