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

To: long-gone who wrote (14694)	7/20/1998 12:51:00 AM
From: PaulM	Read Replies (1) \| Respond to of 116764

Natural Calamity, Price Falls Spell Trouble for Farmers freecartoons.com

To: long-gone who wrote (14694)	7/20/1998 5:54:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116764

FOCUS-Anglogold sees more gains as rand falls 10:50 a.m. Jul 20, 1998 Eastern By Darren Schuettler JOHANNESBURG, July 20 (Reuters) - South Africa's Anglogold Ltd, the world's biggest gold producer, reported sharply higher earnings on Monday and predicted a stronger second half as local gold prices soar on a slumping currency. The gold giant also saw relief for a world bullion market battered in the past year by central bank gold sales and fears that other banks would follow. Anglogold, born from the merger of the gold assets of giant Anglo American Corp of South Africa Ltd, also predicted its cash costs would end well below its $250 per ounce target for the year. The 16 ''gold factories'' that form Anglogold turned in available profit of 418.4 million rand ($68.2 million) in the quarter to June 30, up from 312.5 million rand in the March period. Over the first six months of the year, available profit soared 42 percent to 621.5 million rand. ''These results, the first for the new Anglogold, provide evidence that we are doing what we have promised -- to build not only the biggest, but also the best gold company in the world,'' Anglogold chief executive officer Bobby Godsell told analysts at a results briefing. Godsell said they would benefit in the second half of the year from the dramatic devaluation of South Africa's currency. South African gold producers, under pressure for the past year from slumping world prices, have enjoyed higher rand gold returns in the past few weeks as the rand came under attack from foreign speculators and weakened against the dollar. With gold traded and priced internationally in dollars, the value of rand earnings increases as the rand slides against the U.S. currency. The rand has fallen 32 percent against the dollar since January. ''Obviously we will benefit from the devaluation,'' Godsell said, but he added that non-South African investors would continue to expect good dollar dividends. ''What we will be focusing on in the six months to come is good operational results,'' he said. Anglogold expected to end the year with a cash cost of $220 per ounce, down from $243 per ounce in the June period and $250 per ounce in the March quarter. The company also set a target of saving 221.8 million rand on an internal reorganisation to be completed by early next year. However, it said there would be no major retrenchments. Gold production during the first half of the year rose 4.1 percent to 104,744 kilograms. Earlier this year Godsell had set a target for cutting the company's gold output by 17 percent in 1998. But on Monday he said the company was unlikely to meet that target. Investors cheered Anglogold's results, driving its stock up 600 cents to 300 rand on the Johannesburg Stock Exchange. The results also exceeded analyst's expectations. ''Their gold production is higher than we expected and the bottom line is looking good,'' said David Hall, an analyst with Merrill Lynch Smith Borkum in Johannesburg. Anglogold executive director of marketing Kelvin Williams also predicted good news on the world gold front. Since the end of the June quarter, the issue of European Central Bank gold holdings has been resolved and gold will make up 15 percent of the new European bank. France's central bank also issued a statement declaring that several major central banks did not plan to sell gold. ''I think we are now at a point where we can say that there is a very low likelihood of central bank sales out of Europe in the next three or four years,'' Williams said. In other news, Anglogold said it had finalised a binding agreement with rival Gold Fields Ltd in their joint venture to operate one of the country's premier mines, Driefontein Consolidated. The two gold giants earlier this year signed a non-binding agreement to jointly operate the mine over which they had fought for control. Driefontein's quarterly results were not included in Anglogold's report and are scheduled to be released on Friday. ($1-6.1290 Rand) Copyright 1998 Reuters Limited