SAfrica's Goldco still sees monetary role for gold
06:50 p.m Dec 02, 1997 Eastern
By Hans de Jongh
LONDON (Reuters) - Goldco, the new South African mining giant, said
Tuesday there is still a monetary role for gold despite price-depressing
sales by the world's central banks.
''For many people around the world gold still remains a store of
value,'' Goldco's chief executive officer-elect Richard Robinson said.
''There is still a role for gold in the monetary scene.''
The limited availability of reserve currencies and the sheer
impossibility to ''print'' gold like banknotes will preserve bullion's
position, Robinson said.
Gold prices continued in the doldrums Tuesday. In New York trading, it
held a minor gain of 50 cents at $296.20 an ounce after slumping last
week to 12-1/2 year lows.
The precious metal has been pulled down from a 1996 high of $417.70 an
ounce by a steady flow of selling by central banks.
To help prop up sentiment, Robinson said he wants central banks to
''clarify their position on gold in a co-ordinated and constructive
way.''
The remark follows comments by Bank of England governor Eddie George who
told the European Parliament last week that gold was ''bottom of the
pile and the least liquid of assets'' likely to be held by the European
Central Bank.
Robinson is in London this week to garner analyst and fund manager
support for Goldco, which will be created through the merger of the gold
assets of Gencor Ltd. and Gold Fields of South Africa Ltd.
The company, which will be one of the world's largest gold firms, will
be listed in Johannesburg in February. A London listing will follow.
''There is a point in time -- with the gold price where it is -- where
there is a great chance of it turning,'' Robinson said, while actually
stopping short of predicting the short-term gold trend.
''One would hope to see that gold investors recognize the right time to
get into the market and getting in on a high quality asset like Goldco
is a good place to start,'' Robinson said.
Goldco's three core mines, which together produce 58 percent of the
company's annual output of 3.4 million ounces, operate at cash costs of
$235 an ounce.
The new Tarkwa open cast mine, due to come onstream early in 1998, will
have cash costs of about $225, Robinson said. Production is expected to
be 250,000 ounces, later doubling to 500,000 ounces.
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