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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (15015)	7/29/2003 6:11:55 PM
From: loantech	Read Replies (1) \| Respond to of 39344

jr, I had missed your earlier response when I shot from the lip. <g> tom

To: jrhana who wrote (15015)	7/29/2003 6:32:27 PM
From: austrieconomist	Read Replies (2) \| Respond to of 39344

Kloof and other South African mining stocks. I know you have shied from the SAPM stocks, but I thought this perspective from a reader in today's Russell's Remarks might be of interest. Any posters know about the asserted 20 million ounces of gold below Kloof's existing infrastructure? "these mines harbor some of the biggest gold deposits in the world, and due to the marginal nature of many of their assets they have extraordinary leverage to the gold price. just to give you an example as to why serious gold investors simply can't overlook the South Africans: one of GFI's flagship mines, Kloof, has 20 million ounces of gold 'below works', i.e. right underneath the existing infrastructure of the mine. these ounces are not mentioned anywhere as resources or reserves, but they are there. i can name 10 mid tier NorthAm producers that don't have as much gold in the ground TOGETHER as Kloof has 'below works'. as an aside, there are few things more overstated in the course of investment history than 'political risk' in South Africa. the fact is, SA's mines have paid dividends to their shareholders without interruption since the 1880's, even through the world wars, and all sorts of political upheavals, external as well as internal. the last miners strike was in the 1980's, almost 20 years ago. the recent strike threat once again proved to be nothing but brinkmanship by the NUM, a negotiation ploy basically (just as Durban Deep ALWAYS threatens to close down its mines when wage negotiations are underway). in my opinion, although the SA gold producers are currently out of favor with the investing public, there can be no doubt that they will regain their leadership position if/when gold continues to rally (as both you and i expect it to). one should look at the current bargain basement prices as an opportunity rather than something to be feared. leadership in bull markets changes frequently, and my hunch is that the South African stocks will come into focus again once the coming quarterly earnings reports (which will be bad due to the strong Rand, but still better than those of 90% of their North American competitors aside from perhaps NEM) are out of the way. currently these stocks are discounting the end of the world, which is basically silly. but that's how markets often are...they exaggerate both on the upside and on the downside, and these inefficiencies are what allows us judicious investors to make money after all."