This is from an e-mail from our illustrious leader, but since new surfers are invited to the Cafe to read an update, I post a good portion of the e-mail here:
From: GATAComm@aol.com
To: gata@yahoogroups.com
8:15p ET Wednesday, May 1, 2002
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy's "Midas"
commentary tonight at www.LeMetropoleCafe.com
breaks what may prove to be the story of the
year in the gold world: Barrick Gold's plan
to acquire AngloGold.
"Midas" fits this in with AngloGold CEO
Bobby Godsell's promoting the gold price's
prospects even as AngloGold was beginning to
close its hedges. Ordinarily AngloGold might
be expected NOT to talk up the gold price
while the company was trying to buy back gold
and buy back its promises to sell gold.
AngloGold's talking up the gold price when
the company was trying to buy might seem as
strange as the Bank of England's warning the
world about its gold sales and thereby
driving the price down, and, with the price,
the bank's own receipts.
Of course the Bank of England's behavior
made sense if the bank actually wanted a
lower gold price for surreptitious
political reasons. And AngloGold's announcing
its plans to reduce its hedging, driving up
the cost of its own plans, may make sense too,
as Murphy writes -- in the context of
AngloGold's fending off acquisition by the
super-hedged Barrick, for whom a higher gold
price is death.
Anyway, the relevant excerpt from tonight's
"Midas" is appended with permission because
its author hopes that readers who do not
subscribe to his Internet site will consider
taking a free trial subscription. Just go to:
lemetropolecafe.com
Tell them that Bobby G. sent you!
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Copyright 2002, www.LeMetropoleCafe.com
From "Midas" commentary for May 1, 2002
By BILL MURPHY
www.LeMetropoleCafe.com
The big gold news today has to do with
Barrick and AngloGold. I was told the
following last night by the best of overseas
sources:
"Barrick at the moment has a team of 40
people working in Johannesburg. They want to
take over AngloGold."
The "Midas" analysis of AngloGold is all
falling into place. AngloGold CEO Bobby
Godsell has been pounding the table for
months and months that Anglo has reduced its
hedge book and is going to continue to do so
in an aggressive manner.
That is most unusual. Normally a big hedger
completes a buyback program and THEN
announces what its has done. My colleagues
and I have been scratching our heads as to
why Anglo would announce its intentions ahead
of time, which would surely result in higher
buyback prices. Now we have our answer.
Anglogold wants the gold price to go much
higher to stave off Barrick. Barrick remains
heavily hedged. A soaring gold price is no
great shakes to Barrick and could even do the
company in if their hedge book blows up. In
addition, if AngloGold covers its hedges as
fast as possible, it will add fuel to the
growing gold-buying power and be a factor in
moving the gold price higher. The more
Anglogold covers forwards and the higher its
share price goes, the more difficult it will
be for Barrick to take over AngloGold. For
Anglogold will get too expensive.
Thus Bobby Godsell wants the world to know
that the world's No. 1 gold producer is
covering hedges, so as to encourage others to
cover hedges, so as to encourage hedge funds
and other physical gold buyers to step up to
the plate and get long.
Moneyweb produced an interview with Godsell
today and one of his comments was
unprecedented and sensational:
* * *
BOBBY GODSELL: I think, in fact, the major
feature of our quarterly results -- which I
would describe as operationally steady -- is
that we've indicated again that we think the
gold price is firming and that we've got
better prospects for the gold price than
we've had certainly since 1993, maybe even
since 1987. Against that background, we've
been trimming back our hedge book. We also
have said quite openly that we were taken by
surprise, perhaps like a few other people, by
the dramatic decline in the rand's value in
November and December that left us with a
number of rand-denominated forward sales
contracts that were seriously out of the
money. We've reduced our hedge book by 1.7
million ounces this quarter, or 120 percent
of the company's production. We are now
significantly less hedged than we were last
quarter. That increases our participation in
the firmer gold prices and, in particular,
we've taken out the poorly priced rand
contracts. For that we've paid a price of I
think $7 in the difference between the
received price and the spot price, and I
think to have been able to adjust your hedge
book in that way at really a comparatively
small cost is a great tribute to the people
who run our hedge.
MONEYWEB: Now the gold price is flirting with
around the $310 level. Where do you see that
by year-end?
BOBBY GODSELL: Byron, all we can say is --
and my colleague Kelvin Williams has studied
this market for 17 years now -- everything is
in place for a firmer price. The only
constraint on the price going up is of course
physical offtake, and it is so that, if the
price rises and rises rapidly, you see a
falloff on jewelery demand, and we're seeing
that, for example, in India in quite a big
way. I think the prospects are for a price
between $300 and $350. But we've never
predicted prices; we're just not that smart.
* * *
"Better prospects for the gold price than
we've had certainly since 1993, maybe even
since 1987."
In 1993 gold traded at $400+; in 1987 $500+.
Conservative gold executives like Bobby
Godsell do NOT make casual comments such as
this. There is a purpose to everything he
says in a formal interview. Godsell knows
that GATA has been right all along; that the
gold price has been rigged and kept at
artificially low prices for years. He knows
the rig is coming to an end and he knows the
gold price is explosive for all the reasons
often cited in "Midas" commentary. For those
reasons Godsell is not afraid to hint that
$400 or $500 gold is possible.
I can't be the only one in Gold Land to
understand this. A statement like this has to
freak some of the big hedgers and encourage
other big spec players to load the gold boat.
I consider Godsell's gold comments to be as
significant a development as any since GATA
began and the Cafe opened for business.
It is only a matter of time before the gold
derivative bomb goes off and sinks the evil
cabal forces.
Meanwhile, Barrick Gold continues to stink up
the place. From the Globe and Mail in Canada:
* * *
Barrick misses forecasts
Wednesday, May 01, 2002
Barrick Gold Corp. posted weaker first-
quarter earnings Wednesday as lower gold
sales offset gains from higher average prices
and the company put more of its production
for sale on the spot market.
For the quarter, Toronto-based Barrick -- the
world's second biggest gold producer -- had
net income of $46-million (U.S.) or 9 cents a
share, down from $87-million or 16 cents in
the same period a year earlier.
The latest results came in behind analysts'
expectations. Analysts polled by Thomson
Financial/First Call had been forecasting
earnings of 12 cents a share on average.
During the first three months of the year,
total production was 1.37 million ounces at a
cash cost of an ounce, compared with 1.49
million ounces at a cost of $161 per ounce in
last year's first quarter.
The 8-percent decline in production, Barrick
said, was the result of two mine shutdowns in
late 2001 as well as another closing in the
first quarter and the winding down of four
other operations, which are scheduled to
close throughout the year.
The higher cash costs in the latest quarter
stemmed mainly from higher power costs and
lower grades at its Goldstrike property.
* * *
Once again we have more evidence that gold
supply is going down and will continue to do
so even as the price of gold goes much
higher. Many gold producers have been high-
grading for years, and that is coming to an
end.
Thom Calandra of CBS MarketWatch touched on
Barrick in his column today:
"Barrick failed to meet Wall Street earnings
expectations Wednesday. In their conference
call, Barrick executives fielded numerous
analysts' questions about the company's
hedged sales of gold, a strategy seen by some
as risky if bullion prices rise sharply.
Those questions, from JP Morgan, Goldman
Sachs, and others, were met by Barrick
executives, who assured investors they were
monitoring the situation."
Monitoring the situation? What does that
mean? The arrogant meatheads at Barrick
continue to doubletalk. They are going to get
their hat handed to them. AngloGold has
outfoxed them and Barrick is stuck sucking up
to the Gold Cartel. Hedge book blowups are
coming. Will Barrick be one of them? |
