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To: Alex who wrote (28887)	2/24/1999 5:00:00 PM
From: goldsnow	Respond to of 116845

FOCUS-Ashanti results defy weak gold price 06:54 a.m. Feb 24, 1999 Eastern By Ben Hirschler LONDON, Feb 24 (Reuters) - African miner Ashanti Goldfields Co Ltd reported a 27 percent jump in 1998 pre-exceptional earnings on Wednesday as cost cutting, higher production and successful hedging let it shrug off a weak gold price. Earnings before exceptional items were $73.9 million from $58.4 million in 1997, buoyed by a 32 percent increase in gold output to 1.55 million ounces and a 14 percent fall in cash operating costs to $218 an ounce. But the bottom line was tarnished by provisions for winding down old, high cost operations in Ghana which reduced the post-exceptional figure to $40.7 million from $53.7 million, resulting in the dividend being halved to 10 cents a share. HSBC mining analyst Merlin Marr-Johnson said the lower dividend had made the results neutral but the underlying story of low cost production was encouraging. ''They are good results. The production figures (released last month) have been backed up by good earnings,'' he said. The Ghana-based company, one third owned by Britain's Lonrho Plc and 20 percent by the Ghanaian government, said it would continue to deliver return on capital employed at the top end of the industry range. ''We expect that we will maintain a nine percent return on capital in 1999 and in the subsequent four years of our plan,'' Chief Financial Officer Mark Keatley said in a telephone interview. Keatley added that Ashanti expected to produce 1.69 million ounces of gold in 1999, including its 50-percent share of the Golden Pride mine in Tanazania which started operations at the end of 1998. The company is budgeting to maintain cash costs at around the same level as in 1998 and Keatley said gold hedges should ensure a realised gold price of around $380 an ounce in 1999, little change from last year's $385. Ashanti said maintained its estimate of gold reserves at 23 million ounces, despite adopting a more conservative price of $300 an ounce rather than $350 to calculate viability. Keatley said this reflected a move to newer, lower-cost ore bodies. Ashanti is shutting down its Iduapriem mine in south west Ghana early next year and surface mining operations at Obuasi are to be phased out over 1999-2000. It's next major development is the Geita mine in Tanzania where the first gold is expected to be produced late in 2000. Copyright 1999 Reuters Limited.

To: Alex who wrote (28887)	2/24/1999 5:25:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116845

WORLD BONDS-U.S. to underperform near term 08:50 a.m. Feb 24, 1999 Eastern LONDON, Feb 24 (Reuters) - U.S. Treasuries, already looking weak relative to European bonds, will continue to underperform in the wake of Fed Chairman Alan Greenspan's latest testimony, analysts said on Wednesday. The 10-year T-note/Bund yield spread, currently at 130 basis points, could widen to record levels around 150 b.p. over the next few weeks. In the first day of his Humphrey-Hawkins testimony on Tuesday, the U.S. Federal Reserve chairman was neutral on the outlook for interest rates, saying the Fed must be ready to move policy quickly in either direction. But his comments that the U.S. economy might be overstretched and stock prices overvalued gave rise to concerns about a possible interest rate rise further down the line and prompted a sell-off in the Treasury market. By contrast, European bonds are supported by weak economic growth in Europe and a possible cut in euro-zone interest rates. ''Really Greenspan is trying to jawbone the U.S. Treasury market lower,'' said James McKay, global market strategist at the Commonwealth Bank of Australia. ''If the bond market sells off, it is tightening policy for him and he doesn't have to raise interest rates which would probably cause further problems in emerging markets and destabilise the forex market.'' He said Treasuries would continue to fall and saw the U.S. 30-year long bond trading in a 5.50 to 5.75 percent yield range over the next month or two. The long bond currently yields 5.45 percent and has not closed above 5.50 percent since late August. Graham McDevitt, head of bond strategy at Paribas in London, said the momentum of the spread was driven by a clear fundamental divergence which now had strong technical backing. ''From a technical perspective the break above 120 b.p. on the spread, which has been threatening for the last month, has now clearly taken place and we should now see that spread widening accelerate towards the 140, 150 b.p. area over the next two to four weeks,'' he said. But further out analysts said the spread should turn lower. Chris Golden, senior economic adviser at Flemings Investment Management in London, favoured U.S. Treasuries, saying they looked particularly cheap now. He said the market has probably read too much of a bearish view into Greenspan's testimony, in particular his comment that the Fed must continue to evaluate whether the full extent of the rate cuts in the last quarter of 1998 remained appropriate to the market. ''The actual policy report to Congress, as opposed to just his testimony, is quite clear that the Fed does not consider the credit conditions it was addressing via its rate cuts...have in fact come back to the state that they were in when those rates cuts were deemed necessary,'' Golden said. He said by and large Greenspan was saying there was no need to change present conditions, not that there was any significant increase in the likelihood of the Fed raising rates. Commonwealth Bank's Mckay said if the U.S. economy slowed -- possibly on the back of a stock market slide -- the U.S./German yield spread could contract quite quickly. ((International Bonds +44 171 542 4041, Fax +44 171 542 5285, uk.governmentbonds.news+reuters.com)) Copyright 1999 Reuters Limited.