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

To: William JH who wrote (12086)	5/23/1998 6:45:00 PM
From: Enigma	Read Replies (1) \| Respond to of 116822

<Mining costs being understated> I'm not sure what he means - other than perhaps comparing the direct costs of mining with total costs i.e head office expenses. P/E ratios never seem to mean too much with gold mining companies. I'd rather own the stocks (the right ones - that's the question) than the metal. There's a negative article on gold and gold stocks in todays T. Globe and Mail - a contrary measure perhaps? Regards.

To: William JH who wrote (12086)	5/23/1998 11:06:00 PM
From: PaulM	Read Replies (2) \| Respond to of 116822

"The cost of mining is greatly understated" William, that wouldn't surprise me. I read an article about a year or two ago by Wayne Angle, an ecomomist with Baer Stearns. The thesis was that POG "should" be no higher than $280 because cost of priduction is now $220 to $280. However, what pass currently for avg cost of production estimates are closer to PROJECTIONS about the future (based on some low cost projects soon to be producing). These projections are built into the current POG (made possible by massive central bank lending). Truth is, most EXISTING mines would be finished were it not for hedging. As hedging is no longer profitable for most mines at these prices, we've reached the end of the line in the absence of some massive finds.