Interview with Frank J. Basa, President & CEO of Granada Gold Mine Inc.

Our previous interview: https://www.cruxinvestor.com/posts/granada-gold-mine-ggm-exploration-toll-mine-potential-in-abitibi-3261

Recording date: 31st October 2024

Granada Gold Mines (TSXV:GGM) offers investors a compelling opportunity to gain leveraged exposure to a high-quality gold resource in a top-tier mining jurisdiction. The company's flagship Granada Gold Project in Quebec boasts a robust resource of 1 million ounces (0.5M oz indicated + 0.5M oz inferred) at an average grade of 2 g/t. However, bulk sampling indicates the potential for significantly higher grades of 3-5 g/t in the open pit and 9-10 g/t underground, suggesting the resource may be significantly underestimated.

One of Granada's key advantages is its fully permitted, shovel-ready status. With all necessary approvals in hand, the project is significantly de-risked and can be quickly advanced to production. This, combined with its strategic location on the prolific Cadillac Break, home to over 100 million ounces of historical gold production, makes Granada a highly attractive takeover target. CEO Frank Basa explains, "On the Cadillac Break there's very little rock that's permitted. We're fortunate we have the permits." He notes that several major producers in the area, including Agnico Eagle and IAMGOLD, have processing infrastructure with dwindling ore reserves, stating "All the other mills are looking for feed." This puts Granada in an enviable position as a potential near-term source of ore.

Exploration upside is another key value driver. To date, only 20% of Granada's 5.5km land package has been explored, leaving ample room for resource expansion. A 120,000m drill program is underway to prove up higher grades and grow the resource, with initial results returning intercepts like 107 g/t gold over 4m. Basa sees similarities to other major discoveries on the Cadillac Break, believing Granada has district-scale potential as exploration advances.

To fund ongoing drilling while minimizing dilution, Granada has developed an innovative gold-backed preferred share structure, allowing investors to gain exposure to in-situ gold at the cost of production. Basa comments, "The potential is we can raise money through these preferred shares and minimize any dilution in our current shares."

The investment thesis is further strengthened by the favorable macro environment for gold. With unprecedented global stimulus, negative real yields, and mounting debt levels, gold is poised for a sustained bull market. Many analysts predict prices reaching $3,000/oz or higher in the coming years. Basa remarked, "I think you might be coming into probably the craziest gold market in our lifetimes." High-quality gold developers like Granada should outperform in this scenario.

In conclusion, Granada Gold Mines presents a unique opportunity to invest in an undervalued gold developer with a clear path to production, significant exploration upside, and strong potential to be acquired. With a market cap of just C$8 million, the company is significantly undervalued relative to the quality of its asset base and peer comparables. As the gold bull market gains momentum, Granada is well-positioned to deliver outsized returns.

View Granada Gold's company profile: https://www.cruxinvestor.com/companies/granada-gold-mine

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