News Alert from Dow Jones Online News via Quote.com
Topic: (NYSE:PDG) Placer Dome Inc, (TSE:PDG) Placer Dome Inc.,
Quote.com News Item #5702069
Headline: (UPDATE) Placer Dome Says It's Not Part Of Bullion Buying Arrangement
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VANCOUVER -(Dow Jones)- Placer Dome Inc. (PDG) said it is not part of
any plan or arrangement with other gold producing companies to buy
bullion from central banks or other market participants to influence the
gold market or gold prices.
In a news release, Placer Dome said it has confidence in the
long-term future of gold and that central banks will retain gold as a
significant percentage of their reserves.
Placer Dome said the international gold bullion market has about
1,200 metric tons a day trading over the London Bullion Market
Association, representing about 50% of annual mined production. Due to
the size and liquidity of this market, it said individual buyers and
sellers are generally unable to exert significant influence on pricing.
Placer Dome said it is estimated that about 35,000 tons or about 25%
of above-ground stocks are held by central banks as official reserves.
It said the level of central bank sales hasn't been significant
relative to their overall holdings and to the size of the bullion
market. However, it said that, during 1997, increased levels of
speculative selling and producer forward sales, combined with central
bank net sales, couldn't be absorbed without depressing the price,
despite an estimated increase in demand of 14%.
Placer Dome is a mining company.
Placer Dome Inc. (PDG) issued its news release in response to a
report first appearing in Barron's that executives from Placer, Barrick
Gold Corp. (ABX), Newmont Mining Corp. (NEM) and Anglo American Gold
Investment Co. (AAGIY) formed a plan over Christmas to buy gold from
central banks in order to prop up the sagging gold price.
The Barron's story quoted John Willson, Placer's chief executive, as
confirming the plan's existence. However, Placer spokesman Hugh Leggatt
said Barron's "misunderstood" Willson's comments. He said Willson was
hypothetically discussing what gold producers could do to help support
gold prices.
Legatt stressed that the plan referred to in the Barron's report
doesn't exist.
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