"GoldRisk.com", something new reported by the GLOBE AND MAIL....
Scotiabank eyes stake in gold-hedging Internet site
ALLAN ROBINSON
MINING REPORTER
Friday, September 29, 2000
TORONTO -- Bank of Nova Scotia is one of two banks planning to take a stake in an Internet service that will specialize in evaluating gold hedging strategies, an official with the Web site says.
The bank's metals trading arm, ScotiaMocatta, and Société Générale SA of France are the first two banks to invest in GoldRisk Ltd., said Paul Walker, its chief executive officer. Negotiations are under way with other banks active in gold trading.
GoldRisk puts a value on the gold hedging strategies used by mining companies, banks, hedge funds and commodity traders. Subscribers to GoldRisk.com will gain access to data, such as the average gold lease rates, which is the cost of borrowing gold, obtained from various participating banks.
The system will allow mining companies to stress-test their trading positions by evaluating the risks of their option strategies given changes to the price of gold and lease rates.
A recent study commissioned by the World Gold Council estimates the gold derivative market at the end of 1999 involved the lending and swapping of about 5,230 tonnes of gold. Gold is trading at about $276 (U.S.) an ounce.
New accounting rules in the United States require gold mining companies to regularly report the current value of their hedge trading positions.
Next week, the Australian Gold Council will reveal rules that require gold producers to disclose sufficient information to allow analysts to value their hedge positions, Greg Barns, its chief executive officer, told a gold seminar in Toronto yesterday.
GoldRisk said it intends to start with a gold valuation service, and plans to expand into valuing silver, platinum and palladium.
The company is controlled by London-based Gold Fields Mineral Services Ltd., a precious metals consulting group, and Brady Ltd. |
