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

To: Al Cern who wrote (23182)	11/19/1998 7:02:00 PM
From: Michael Bidder	Respond to of 116762

If the price of gold goes up, the carry traders will suffer big losses>>. I am a contrarian. So when I hear talk like this it makes me feel confident that gold is going nowhere. Michael Bidder

To: Al Cern who wrote (23182)	11/20/1998 2:44:00 PM
From: baystock	Read Replies (1) \| Respond to of 116762

Al Cern, But if the federal reserve does not want a big price rise in gold they can suppress it, by settling the carry transaction for cash rather than gold, among other tricks. Not forever, but atleast for a year or two they can hold things down. Ram

To: Al Cern who wrote (23182)	11/20/1998 5:00:00 PM
From: Ming	Respond to of 116762

Ways of profiting from coming long-term strength in gold markets: 1) conservative investors IMO should focus on senior companies with strong balance sheets: Barrick, Kinross, Agnico Eagle, etc. 2) More aggressive investors should focus on companies that are either low cost junior producers or exploration companmies with promising projects and strong financials, that have been depressed by drop in gold prices. tHE IMPORTANT POINT HERE IS FINANCING: IF A COMPANY HAS ALREADY SECURED FINANCING FOR A PROJECT, THEN IT IS A MUCH SAFER BET UNDER CURRENT ADVERSE CONDITIONS. Two examples of companies would be Greenstone and Indochina Goldfields. Greenstone, incredibly, is still profitable at current prices! Indochina, on the other hand, has one of the lowest cost copper mines in the world, that has a total cost(cash+overhead) of $0.50/pound. Their entire burmese copper project complex contains around 2 billion tonnes of reserves. )It also owns a commanding interest in Bakyrchik Gold, which has a 13.4 million deposit, but which is only profitable at prices above $310/oz. It is my belief that we should see $330 very soon(possibly by the end of the year), which will definitely make Indochina the owner of a promising blockbuster project. Political risk: Kazakhstan is next door to Russia, but so is Kyrghizstan, where Cameco has its 500 000 oz/year Kumtor project, which has been operating for more than a year now. The thing one has to realize about these central asian USSR spinoffs is that they are too cash-starved to risk attracting the ire of western investors. Greenstone is operating in central America, and although Mitch did some considerable damage to the region, Greenstone's projects were relatively undisturbed by the storm. This region has stabilised itself politically during the last few years, and the risk is therefore very small. Burma and Vietnam, 2 countries where Indochina has significant projects, are also cash-starved. In burma, however, INDOCHINA HAS THE SUPPORT OF MARUBENI CORP, A JAPANESE CONGLOMERATE WHICH HAS AGREED TO FINANCE THE PROJECT AND PURCHASE ALL OF THE MINE'S PRODUCTION FOR THE FIRST 7 YEARS. This significantly reduces the risk. Bonus: Indochina also owns a 15% stake in Emperor Mines of Fiji.(150000 oz producer) FiNANCIAL STATS: Indochina is in a lot stronger financial position than most senior producers. IT HAS 60 MILLION IN CASH AS OF THE END OF AUGUST. THE STOCK IS CURRENTLY TRADING AT HALF THE VALUE OF THIS CASH. First, production has already started in Burma, which means that the company has a highly profitable mine at this moment(a fact that few seniors can boast of at current metal prices). Secondly, although the company is still burning cash through ongoing exploration projects in various countries, most seniors(including even Kinross) are burning cash by producing below cost! Greenstone has a weaker position, but is stable nonetheless. iN THE SHORT-RUN, THE RALLY WILL BE LEAD BY SENIORS. iN THE INTERMEDIATE TERM, MAXIMUM LEVERAGE CAN BE ACHIEVED WITH STRONG UNDERVALUED JUNIOR PRODUCERS imo.