Sunridge Gold (CVE:SGC), which is soon to wind itself up, has been tipped as a ‘buy’ in the November edition of the Gold Newsletter.
The newsletter’s stock-picker, Brien Lundin, said a Chinese conglomerate has agreed to acquire a 60% interest in the Asmara Mining Share Company in Eritrea that is worth about 33 cents per fully diluted Sunridge share.
Lundin notes this would suggest an arbitrage play is possible, given that Sunridge trades at around 27 cents currently.
Lundin’s advice is to grab the shares for a quick in-and-out profit.
Sunridge shareholders have yet to vote on the proposed dissolution of the company, but Sunridge’s directors are recommending they do so.
If shareholders vote in favor of the dissolution, the plan is to return cash in two tranches after all of the company's liabilities have been settled.
The amount of net cash available to be distributed to shareholders is subject to a number of risks and uncertainties, the company cautioned, but management currently expects that the aggregate amount of the distributions to shareholders will be not less than C$0.35 per share.