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

To: Ken Benes who wrote (43544)	10/22/1999 7:10:00 AM
From: long-gone	Read Replies (1) \| Respond to of 117273

<<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>> That's why I'm thinking maybe some of the smallest / smartest operations may be as good as some of the largest. There are some miners operating on a smaller scale at a slight profit with minor hedges (when gold was in the $270 range) , at near what I call the boutique level. It may be this small / smart specialized operation that will yield best return on the $ invested same as some of the smaller most modern steel producers.

To: Ken Benes who wrote (43544)	10/22/1999 10:29:00 AM
From: goldsheet	Read Replies (1) \| Respond to of 117273

> Your analysis does not hold water, particularly for a commodity based business that is selling its reserve base at a discount. A commodity business has a standard product and there is lots of competition. Gold isn't being sold "at a discount" but at the current fair market price. If one producer doesn't supply the commodity, another will. This leaves the miner two primary options: 1) Reducing cost per ounce, and if increasing production reduces costs then so be it. You don't have to like it, but it is a reality. 2) Getting a higher than current market price by using hedging. Again, you don't have to like it, but it is a reality. Econ 101 Viewpoint: The real problem in a commodity business is one is a price taker forced to accept prices set by the highly competitive marketplace, as opposed to having the ability to set prices.