Sir Bob (73) turned back the clock 39 years with a remarkable two under par 69 to sit one shot behind Saunders and just ahead of nine players who equalled or beat par score of 71.
It was Sir Bob's first competitive round of golf at Balmacewen since he finished eighth in the 1971 New Zealand Open, won by Peter Thomson (a record ninth national title), although Sir Bob said the layout of the course had changed since then.
He described his round yesterday, playing alongside Sir Brian Lochore, Andy Haden and Murray Deaker, as "pretty steady", posting birdies on the 2nd, 8th, 14th and 17th holes but was ruing giving away bogeys on the 3rd ("a silly three putt") and the 4th.
It is not the first time Sir Bob has achieved that rare feat of beating his age in competition golf, having grabbed the headlines at the New Zealand Open in 2007, when he made the cut with rounds of 68 and 70 at The Hills and last week he shot a two-under 70 at Millbrook.
Sir Bob was given a congratulatory pat on the back from Sir Brian as they compared notes in the clubhouse after the round, the latter stages of which were played in a stiff northeasterly wind described by Sir Bob as "a bit brutal and cold".
It was the first time the two sporting knights had played together, even though they had been friends for many years, Sir Brian said.
Asked if he had learned anything playing alongside New Zealand's greatest golfer, Sir Brian smiled and said: "Yes. I learned you don't have to be a big fella to hit the ball a long way."
Sir Bob's superb round was just the result the Otago Golf Club was hoping for, in terms of attracting a big crowd to watch today's final round.
He will tee off at 12.52pm alongside Haden, Deaker and Duncan Croudis, one of Otago's most promising young golfers, who replaces Sir Brian, who has had to return north.
Saunders (53) gets the honour of teeing off last, at 1pm today, after his excellent three under 68 yesterday, which could have been even better but for a bogey 5 on the difficult 18th, which played long into a strong head wind.
Saunders shot matching rounds of 34 with birdies on the 1st, 8th, 10th and 15th and showed the value of his winning form at the Kelvin Heights pro-am on Tuesday, when he shared first place with Graham Banister.
The leaders for most of the day were Australians Greg Carroll and Brian Jones, who posted one under 70s.
Carroll, who hails from McKay, turned 50 only last August.
Jones (58), however, is a seasoned touring pro who spent 26 years on the Japan Tour where he "paid a few bills".
He also remembered playing in that 1971 NZ Open at Balmacewen.
He described his round yesterday as "nothing startling" (three birdies, two bogeys) and felt he let a few birdie chances slip.
The best of the other New Zealanders, behind Sir Bob, were Jim Lapsley, Craig Owen and Paul Smith, who all shot even par 71s.
The stage is set for what could be a remarkable day in New Zealand's sporting history today.
