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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.80

+0.9%

Nov 19 4:00 PM EST

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To: goldsheet who wrote (48144)	2/6/2000 12:06:00 AM
From: russwinter	Read Replies (3) of 116764

The ten largest miners in the world have sold forward 70 million ounces. The three companies you mentioned are among the lowest cost producers of the bunch. Further, even they are mining out the juiciest part of their reserves right now. Do you really think that all of NM, ABX, and PDG deposits have under $200 cash costs? They will start to hit the wall sooner than you may realize. No, by and large what you are seeing is the cream that can't be replaced cheaply because of the exploration dearth. And to replace those reserves, you need to factor in $30-$50 in exploration costs plus another $50 capital costs. My point is that sure there are some low cost deposits being produced, but it's a small percentage of overall mine production. There also many marginal high cost producers that are heavily hedged, and that won't survive calls. There is no way you can argue that the industry is viable long term with this strategy.

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