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It seems like the psychology has shifted.
This could also be ONE of the reasens for the gold rally.
>GOLD FIELDS SLAMS INDUSTRY HEDGE ADDICTION
>
>By Darren Schuettler
>
>JOHANNESBURG, Feb. 3 (Reuters) -- Gold Fields Ltd, the
>world's second biggest gold producer, said on Thursday
>it was insane for companies to keep major hedge books
>that had depressed gold prices and made new projects
>uneconomic.
>
>Gold Fields, which bought back the bulk of its hedges
>last year, also urged institutional investors to pressure
>companies to ween themselves off hedging.
>
>"I don't think hedging is appropriate at the level and
>the scale it has developed in the mining industry,"
>Gold Fields Chairman and Chief Executive Chris
>Thompson told analysts after releasing the company's
>quarterly results.
>
>"To sell ounces in the ground at $270-$280 (an ounce)
>when the price of replacing them is $350 (an ounce) or
>better is just insane."
>
>Thompson has publicly criticised the industry's hedging
>practices since Gold Fields repurchased most of the 1.8
>million ounces committed to forward sales and call
>options.
>
>The company still has about 200,000 ounces of forward
>sales required for its Tarkwa gold project in Ghana.
>
>Thompson said he was not opposed to hedging to protect
>particular assets or if it was required by lenders to
>fund a project. But the industry's level of hedging was
>out of control.
>
>"When it gets to a scale where the top 10 mining
>companies in the world have over 70 million ounces
>hedged ... it has led to a lower and lower gold price.
>
>"If we collectively continue to do that, we're going to
>ensure that no new mines are developed and...you
>actually have to write down reserves."
>
>Gold Fields had seen its mineral reserves fall to about
>74 million ounces from more than 90 million due to the
>lower gold price, he said.
>
>"I think it's time the institutional investment
>community point that out to the mines, that they
>shouldn't do it. It's not in our interest."
>
>Thompson said the industry should take a broader view
>of the market. "It involves looking at overall industry
>and community attitudes to gold and the image of gold."
>
>He said it was still very difficult for the public to
>buy gold, noting that the recent UK gold auction was
>largely restricted to institutions.
>
>"There is a lot we need to do as an industry to start
>to look at making gold available to the public and
>create a market for it," he said.
>
>-END-
>
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