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

To: long-gone who wrote (88709)	8/12/2002 6:19:40 AM
From: E. Charters	Read Replies (2) \| Respond to of 116756

It is what I plan to do when I get Wildcat into production. If you are mining gold for 100 dollars US an ounce, and I understand Goldcorp is mining it for about $60.00 US, it makes sense to stockpile if gold is headed up. Let's say gold goes from 316 US today to 400 by next spring. If you take carrying costs on the cost of the product bought or made (because its cost has to be replaced by money borrowed in order to operate let's say), and the opportunity cost on the percent of its sale price: If you have 100 dollars invested in each ounce, at a carrying cost of 11% per year. It will cost you $11.00 per ounce on your spent money to hold it in inventory for a year, with an additional opportunity cost of $20.54 on the $316, in TBill interest (.06) lost during that same period. Gold however would appreciate $84.00 US, a 26.6% gain on 316. So gold is obviously the best instrument to hold for them. Holding the gold in inventory beats their out of pocket inventory costs (on $100.00) by 81% and their opportunity costs or projected losses (on $316.00) by 20.1%. EC<:-}