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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (43530)	10/21/1999 8:55:00 PM
From: long-gone	Read Replies (1) \| Respond to of 117272

<<They are great indications the gold mining business is getting much more efficient. >> No doubt. The best mining companies are very efficient. Have you noted that several were able to make a slight profit with gold in the $260-270 range? The problem is, they simply can not be more efficient than Central Bankers, and governments intent on destruction of the value of an asset. Some of them are very very good at their jobs. When one is good at their job there should be a reward for production of something as rare as gold. The one part of the manipulation I have hated the most was the lack of willingness to report on the select, the few mining firms who were able to turn loss into profit in this worst of markets! Now the greater question, "When the best mining firms show a monster profit in the next quarter will they get note? At least one is producing millions of OZ at $50 more profit than they were. When those INCREDIBLE profits hit the bottom lines, will CNBC(and the rest) say a word, a single phrase? The profits of W.F.O. production at an additional $50 for each ounce produced will far out strip a YHOO, will this work be noted?

To: goldsheet who wrote (43530)	10/21/1999 9:50:00 PM
From: Ken Benes	Read Replies (3) \| Respond to of 117272

Bob: A commodity based business is supply and demand. Yes, Freeport is producing more, yet there cash flow has declined. If that is the modern way of doing business, than in my estimation, you are in a terrible business. I run a business, and I can tell you, that if prices get too low, I turn away the business for two very good reasons: first, It is easier to cut back the scope of work, reducing expenses, and operating marginally, until business picks up. Why have all the problems of running flat out, if you are not making money. I rather look for other opportunities or come up with a different business plan rather than work for nothing. Secondly, if I run my company at either a break even point or a loss, because of lead times, it will take me longer to turn a profit when business turns for the better, because I will be working off past unprofitable contracts. Your analysis does not hold water, particularly for a commodity based business that is selling its reserve base at a discount. It is far wiser to reduce output and get a higher price for your goods than discount it and sell more, depleting your base. The oil producers have been very effective this year using this concept. The gold producers obviously do not get it and an increase in production pressuring prices is testament to their lack of sophistication. It is also an explanation of why so many of the producers have become victims of the bullion banks that have sold them into hedging programs that have debased the value of their reserves. Bob, you are wrong. If you were talking about manufacturing, I would agree, relative to a commodity based business, efficiency while laudable when you are commanding a decent price for your is self defeating when you produce more for less. Freeport is not a good example. They are a one mine company with a 30 year lease. At present rates of production, they will be unable to deplete the grasberg. While they may get another cow, that is a long time in the future. It is in their interest to mine the hell out of the property. Freeport has other management problems, Moffet has seen better days, and the company could use new management. He dividended out his cash and was forced to take on a partner because his leverage had run out. They would have been a lot wiser keeping the cash and using the free cash flow from grasberg to diversify out of Indonesia and run the mine themselves. The developed grasberg and the erts-whatever themselves. I better quite now, I have become reduntant. Freeport gets under my skin. I made a lot of money off that company and sold out three years ago at its high when I saw the deficincies in management. I had planned to keep it a lot longer. Ken Ken