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Jan 2003 - Gold Price Pt 2

The black art (part 2) of short-term gold price trading

Long-term forecasting of the gold price is fine for modeling purposes, but what do you use in day-to-day trading for gold or gold shares.

Feb 2003 - Gold Volatility

Gold returns to volatility

In our opinion the gold price has reverted to what it was like pre-producer hedging, which was not just 5 or 6 years’ ago, but actually more than 15 years’ ago. The GFMS Gold Surveys record the net new forwards as shown in Table 1.

Mar 2003 - BEE

BEE – Is the market over-reacting?

At the Indaba Conference in Cape Town from 18-20 February 2003, a very sobering perspective of the expected unrecoverable discount impact of BEE (Black Economic Empowerment) on share prices was given by a number of brokers.

Apr 2003 - “Money Pipeline”

Caught in the “Money Pipeline”

Gold companies enjoy a relatively simple method of receiving revenue from gold that they produce, since when it leaves the mine gate it is already in a salable form, that usually only requires refining to 4-9s or 0.9999. Companies are usually paid based on the price of that day that it leaves the mine gate.

May 2003 - Diamonds

Diamonds Have Been Too Hard

Diamonds, like gold, have their own allure or attraction. Phrases like “diamonds are forever” and “diamonds are a girl’s best friend”, immediately spring to mind. As the hardest naturally occurring gemstone, they have a documented history of being included in crown jewels for centuries if not millennia, and the larger ones are often sold for princely sums especially if they are pink in colour.

Jun 2003 - Platinum Mines

Platinum mines do not only produce platinum

We find that a number of advisers and investors still perceive platinum companies as only producing platinum and not up to 12 different metals all from the same reef or ore zone, namely the 6 PGMs or platinum group metals of platinum (Pt), palladium (Pd), rhodium (Rh), iridium (Ir), ruthenium (Ru) and osmium (Os), the other 2 precious metals of gold (Au) and rarely silver (Ag), plus the 4 base metals of nickel (Ni), copper (Cu), cobalt (Co) and chrome (Cr).

Jul 2003 - FSR

Approaching FSR Likely to Affect ALL Mining and Exploration Companies

Most members of the public should by now be aware that brokers and advisers are concerned about the SOA contained in the FSR (Statement of Advice in the Financial Services Reform Act of 12 March 2002), that is in its transition period before being formally fully implemented from 12 March 2004.

Aug 2003 - Invest Outside Aust

Investing Outside of Australia Becomes Fashionable Again

The old adage for gold share investment of firstly Western Australia, then other (mainland) Australia, and then outside of Australia has changed dramatically in the past year, especially in the past 6 months. The rationale for why WA gold companies usually had twice the market cap of those in say NSW (aside from Newcrest’s revival) is that the gold orebodies in WA are perceived as being more predictable than in NSW.

Sep 2003 - Investment Decision

What is relevant when making an investment decision?

The subject of what is considered relevant when making an investment decision is extremely broad, however, for this month’s column we have focused on takeover situations and research.

Oct 2003 - China Part 2

China – Part 2 – The Chinese Gold Industry, some of its mines and exploration concepts.

Last month, we covered the basics on China, and in this section, Part 2, we have covered our impressions of the Chinese Gold Industry from a Michelago trip to its operations in China.

Nov 2003 - Nickel Price

How long can the nickel price stay about US$5/lb?

This time round, everyone could be in for a big surprise.

On 7 November 2003, the LME nickel price closed at US$12,080/t or US$5.45/lb, and the forward curve price is still above US$10,000/t or US$4.54/lb in 27 months’ time (or January 2006). In their presentation on the Junior Nickel Sector at the Paydirt Nickel Conference in Perth on 23 October 2003, Hartleys showed a comparison of nickel price forecasts from some of the major brokers which showed a general expectation of the nickel price peaking at (depending on the broker) either about US$4.25/lb in 2004, or about US$4.75/lb in 2005, before collapsing to and then remaining at about US$3.25/lb from 2006.