To:John Barendrecht who wrote (252) From: John Barendrecht Monday, Jul 7, 1997 12:29 AM Respond to of 80032
Golds retreat further on bullion's freefall Saturday, July 5, 1997 By PAUL BAGNELL Mining Reporter The Financial Post ÿShare prices of Canadian gold producers took another beating Friday, as the aftershock of a steep drop in the bullion price rattled investors for a second straight day. ÿAnalysts said high-cost gold miners now face the difficult choice of operating money-losing mines or temporarily shutting them. ÿIf closings do occur, they said, the stocks of their owner companies will undergo further pressure. <Picture: GOLD STOCKS1> ÿThe Toronto Stock Exchange's gold and precious minerals index fell 3.34% yesterday, tumbling 271.33 points to 7855.20. That was on the heels of Thursday's 2.49% decline. ÿThe biggest percentage losers Friday were: Pegasus Gold Inc. (PGU/TSE), which fell 6.17%, or 50›, to $7.60; Placer Dome Inc. (PDG/TSE), down 5.76%, or $1.25, to $20.45; and Echo Bay Mines Ltd. (ECO/TSE), down 5.3%, or 40›, to $7.15. ÿMeanwhile, the price of gold settled deeper into its 12-year low. The closing price in London was US$324.45 an ounce, off 75› from the morning fix of US$325.20. ÿAt one point during the day, the price dipped to US$322.75. ÿThere was no trading in New York because of the Independence Day holiday. <Picture: GOLD STOCKS2> ÿFriday's London close was 25› higher than the Thursday closing cash price in New York of US$324.20. ÿOn Thursday, the New York cash price plunged by US$7.10 on the surprise news Australia's central bank had sold 167 tonnes of gold in the past six months. ÿJohn Ing, president of Maison Placements Inc. in Toronto, said he thinks the gold price has touched a bottom, but that miners with cash production costs of more than US$250 an ounce are feeling the heat. ÿWhen other costs of doing business are added to cash costs at this level, Ing said, making money becomes difficult. ÿ"It's going to mean closures, it's going to mean shelving of expansion plans - and it's going to mean lower stock prices, in some cases," he said. ÿCompanies with production cash costs at US$250 or more an ounce in the first quarter included Getchell Gold Corp. (GCO/TSE) at US$462, Royal Oak Mines Inc. (RYO/TSE) at US$372, Pegasus Gold Inc. (PGU/TSE) at US$297, Kinross Gold Corp. (K/TSE) at US$311, Echo Bay at US$267 and Cambior Inc. (CBJ/TSE) at US$260. ÿSome high-cost producers may be able to avoid mine shutdowns through aggressive forward selling of gold, which usually brings a higher price. ÿPegasus and Cambior, for instance, reported "realized" gold prices of US$460 and US$452 an ounce, respectively, in the first quarter. http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=1712108
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