Replies to post #151946 on Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

*** Newmont sees "substantial" gold price potential ***


Newmont sees "substantial" gold price potential

Reuters, 09.16.03, 11:27 PM ET
By Mary Powers

AREQUIPA, Peru, Sept 16 (Reuters) - Newmont Mining Corp sees a substantial possibility of higher gold prices but will continue to develop low-cost mines and cut debt to hedge against any future price fall, its chairman said on Tuesday.

Wayne Murdy also said Newmont, the world's largest gold producer, expects to make some announcements next week on "exciting" capital investment projects in the pipeline.

"We think the environment is very good for a strong gold price," Murdy told Reuters in an interview at a mining conference in this southern Peruvian city.

Asked if he shared the view of Newmont President Pierre Lassonde that gold would hit $450 an ounce over the next year, Murdy said: "I don't predict prices but we feel the trend is that there's still substantial upward possibilities" for the price.

Spot gold was trading at $373 an ounce at 0300 GMT on Wednesday.

Murdy said continuing declines in output worldwide and an extended dearth of exploration were among factors that bode well for higher prices. Low interest rates and a weaker dollar were also boosting prospects for the price, he said.

Murdy said that despite the upward trend in the price, producers should try to develop low-cost operations, maintain a strong balance sheet and invest in projects with a good rate of return to protect profits in times of depressed gold prices.

Newmont was paying down debt aggressively in order to reach its goal of a 10 percent debt-to-capitalization ratio, he said.

MORE CONSOLIDATION POSSIBLE

On the possibility of acquisitions, Murdy said there was room for consolidation because the gold industry remains "very fractured."

"You end up with better investment decisions in that environment," he said.

Newmont bought Australia's Normandy Mining last year, and another takeover battle is brewing in the industry. Randgold Resources Ltd could make a formal offer for Ghana's Ashanti Goldfields Company Ltd as early as this week, sources close to the situation said on Friday, stepping up a bidding war with South African giant AngloGold Ltd.

The trend in the future will be toward fewer, larger mines as companies will be required to assume "the full costs of mining, including the environmental and social (aspects)," he said.

Newmont operates Minera Yanacocha in Peru, the crown jewel of its properties worldwide. It has invested heavily in the northern region of Cajamarca, where the mine is based.

Murdy said Newmont "looks at everything, all the time" for potential acquisition targets.

Nevertheless, Newmont's strategy has always been "to spend enough on exploration to grow the company from the drill pit because we can control that."

Murdy said Newmont would make a decision by year-end on two low-cost projects in Ghana, where he said Newmont had carried out "a very successful" exploration program over the last couple of years.

"They have the potential, from what we see now from our exploration results, to be a very significant producing segment for Newmont," he said.

"It's very exciting right now but we haven't put out any public information on it ," Murdy said. "Next week we're going to talk about some of the projects we have and the organic growth we have in front of the company."

The information on the projects would be made during the Denver Gold Group Conference, a major investment forum for the industry, he said.

Copyright 2003, Reuters News Service

http://www.forbes.com/markets/newswire/2003/09/16/rtr1083523.html

[Ace Hanlon]

The problem is every time it looks like we might break hard but do not, we then rally sharply.

[scrote]

The Kid Sister of All Tops?
by Rick Ackerman

Thursday’s bullish-as-all-get-out edition of the Black Box contained some ambitious price targets, and although not a single one of them has been achieved as yet, it looks as though it will only be a matter of time. My guess is that all of the hidden pivots targets we’ve been monitoring will be reached, probably within no more than a day or two. Assuming I’m right, will that mark the end of the bear rally begun in March, as I’ve implied it will? Quite possibly. But as we all know, Mr. Market rarely does exactly what we expect; and I’ve been expecting a major top on the Dow at exactly 9807 so eagerly and for so long that you can hardly blame me for raising the possibility around now that this well-advertised Niece/Nephew of All Tops might, just might, prove to be a bust.

Not that I don’t think the Dow target will be reached, only that we should not feel cheated if the target does not exhibit the kind of stopping power we might have expected from a hidden pivot that was announced way back in June with a drum roll and a sounding of trumpets. The market gods let prognosticators be right some of the time -- just usually not that right. Of course, being merely sort of right won’t stop some of us from claiming six months from now, as we know some of us will, that we alone called the top – to the day! Actually, if our forecast proves to have been correct within a thousand Dow points and two months, that will be plenty enough to fuel bulk mailings – "The Man Who Called the Top!" – until 2010, at least. If I had kept that 9807 Dow target all to myself, would it have guaranteed a top exactly at that price? We’ll probably never know.