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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: VAUGHN who wrote (1733)	7/6/1998 3:11:00 PM
From: VAUGHN	Respond to of 7235

Hello All A news article suggestive of potential or eventual labour unrest in the RSA and also indicative of Au mine closure reducing world production, perhaps indefinitely. ********* Rand gold rise unlikely to slow SAfrica shake-up Reuters Story - July 06, 1998 07:30 By Darren Schuettler JOHANNESBURG, July 6 (Reuters) - A soaring rand gold price may be a relief for South Africa's embattled gold producers, but it is unlikely to slow the pace of restructuring that has cost thousands of mining jobs. Despite calls from the country's biggest mining union to halt painful retrenchments, industry officials and analysts said on Monday they expect the shake-up to continue as South Africa's industry battles to compete against leaner international rivals. "We are certainly not going to be basing the future viability of the industry on short term (market) gyrations," Roger Baxter, an economist with the South African Chamber of Mines, told Reuters. However, the National Union of Mineworkers (NUM) said on Monday it will press the industry to recall workers who have been retrenched or put on extended leave since gold's collapse last year. "With the gold price doing much better, we want to see retrenchments halted," said NUM spokesman Ben Molapo. After a century of mining, South Africa's famed Witwatersrand basin has some of the deepest and costliest mines in the world. A wave of restructuring has chopped thousands of mining jobs and closed unprofitable shafts in a bid to trim cash production costs. But South African gold mining is still more expensive than almost anywhere else in the world. Now while the rest of South Africa despairs over a depreciating rand, the country's struggling gold companies are grinning as the rand gold price hit 1,974 per ounce on Monday, its highest point in at least 2-1/2 years and well above 1,404 recorded on January 1. With gold traded and priced internationally in dollars, as the rand slides against the U.S. currency, the value of rand earnings increases. The rand tumbled to record lows on Monday as investors reacted negatively to weekend news that Labour Minister Tito Mboweni would be South Africa's next central bank governor. The rand has fallen around 40 percent since January as speculators keep up a concerted attack on the ailing currency. The unit hit a fresh low of 6.75 to the dollar on Monday. On the Johannesburg Stock Exchange, the heavyweight gold index rocketed to its highest point in over a year, climbing 105 points, or 9.8 percent, to 1,174.7 at midday. The key gold index, which has loped along for much of the year due to slumping world gold prices, last reached these heights in mid-June last year. Since domestic mines bear their costs in rand, a depreciating currency adds up to higher margins of return for all producers, particularly those companies more exposed to the gold price. "Everybody wins with this gold price, but the guys who are more naked to the price are looking very good," said a South African mining analyst. Among the more exposed producers, Gold Fields Ltd added 400 cents to 35.50 rand. Harmony was up 300 cents to 3100 rand, a 52-week high of 31 rand. Durban Roodepoort Deep rose 185 cents to 15.55 rand. Analysts have forecast the increase in average spot gold price would have added about one billion rand to revenue stream of gold companies. This buoyant outlook has union leaders demanding that the industry scale back retrenchment plans formed months ago when the rand gold price was wallowing in the basement. NUM estimates that 12,000 miners have lost their jobs since January, with thousands more in danger on at least nine marginal mines. Since the industry has linked the need for cutbacks to the slumping gold price, it should take its foot off the restructuring accelerator as the gold price improves, say union leaders. But analysts say companies must still focus on cutting costs to complete globally with leaver rivals in Canada, the United States and Australia. "Although there has been a spike in the gold price and everything is looking pretty good, the jury is still out over whether this is a just a one-off situation," the analyst said. South African companies averaged cash costs of just over $300 per ounce in 1997, compared to $216 per ounce for U.S. companies and $221 per ounce for Canadian firms and $261 per ounce for Australian miners. "The higher rand gold price gives the marginal mines a little more time, but the dollar gold price is still the be-all or end-all for this industry," the analyst said. Regards

To: VAUGHN who wrote (1733)	7/6/1998 7:28:00 PM
From: Andrew	Read Replies (1) \| Respond to of 7235

Hello Vaughn and Note I agree that there are some real good buys in this market and I like your picks Vaughn. What do you think about Rex diamond, im thinking about picking some up. Do you know anything about their prospects? I like gold stocks right now not much down side left. In particular I like some of the junior producers with low costs, namely Greenstone Resources. $160/ounce costs, 4 producing mines budgeting 400,000 ounces for 1998. There are others as well, slowly filling up my portfolio. Andy