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

To: Alex who wrote (11400)	5/7/1998 6:53:00 PM
From: Robert Morris	Respond to of 116832

According to George Milling-Stanley of the World Gold Council, "full year demand for 1997 was 9% above the previous year [1996], as demand in India, the Middle East, northern Asia and Latin America was so strong that it more than offset the weakness in some countries in eastern Asia." Jewelry demand rose 8% while investment demand rose 19%. Canyon Resources Corp. liquidated most of its gold hedge position, realizing $11 million from the transaction. Canyon had sold forward gold at a higher price level and decided that, since the price was unlikely to fall much further, it would buy back its contract. Harmony Gold Mining Company of South Africa, one of the few profitable small independent producers remaining in that country, plans to buy the Bissett gold mine in Canada for 50 million rand from Rea Gold Corp. of Canada, which was put into receivership in December 1997 after running into funding problems. Harmony says that Bissett is capable of producing 60,000 ounces of gold a year at a cash cost of $240 per ounce, with total reserves of 670,000 ounces. The acquisition is the first for Harmony outside of South Africa. According to managing director Bernard Swanepoel, the "bargain price" purchase provides his company with a "low-risk entry into the international arena. We are, therefore, confident that its acquisition provides us with an exceptional growth opportunity at a minimal risk." [This event is significant because it indicates that the inevitable consolidation of the gold mining industry, with so many producers given the small total market capitalization, is likely to essentially ignore national boundaries as merger activity intensifies.] From The Gold Mining Outlook* by Steven Kaplan* You can now discuss Steven's column with him on his moderated board: investor1.com just click on his logo at the bottom of the page