The Philipino Peso, like the South African Rand, has totally collapsed, meaning mining at Benguet will be done cheap in Peso, and sold in more valuable $US, which is what has made DROOY move like it has due to Rand collapse.
Rand collapse? Really? When? Against what currency that matters in context with the PoG?
I don't know or care about the Philippine Peso nor do I care to check the veracity of that part of your comment because it's irrelevant to me and appears to be but another of your BENGB.OB pump jobs.
I do, however, suggest you do a double take on the bolded part of your statement which is totally in error.
One of the reasons that DROOY has tanked is due to the Rand's comparative strength to the US Dollar. The SA miners production costs are measured in the stronger Rand and their production (gold) is sold in cheaper dollars which is exactly the opposite of what you presented in your example above.
Take a look at the rate of gain the Rand has accomplished in comparison to the US Dollar:
A recent post to George Cole (#101621) highlights my point regarding the strength in the Rand hurting the SA miners earnings: ============================================================= George wrote, The SA gold stock index is now down another 5% on top of yesterday's smash.
Hi George, You may be right about the outcome of the No. American gold stocks because some of the biggie SA miners are in the gold indexes, but I think the big selloff in the South African gold index is due primarily to the recent vocalized perceptions by their analysts that the strength in the SA Rand is really hitting the SA miners where it hurts.... The bottom line! DUH!!!
I've seen a half dozen or more references to that 'late to the party' realization in the past two days. This is but the most recent:
Gold earnings seen lower due to rand Wambui Chege Posted Fri, 25 Apr 2003
South Africa's top three gold mining companies are expected to report a slide in earnings for the three months to end-December, knocked by a strong rand and a dip in output, analysts said on Friday.
Number three gold producer, Harmony Gold, is the first of the big three to report results for the third quarter of its 2003 financial year on Tuesday at about 8am.
A Reuters poll of seven analysts forecast Harmony's headline earnings per share (EPS) falling by about 42 percent to 151 cents. Forecasts ranged from 137 cents to 185 cents. Headline earnings strip out exceptional items and their tax effects.
"Basically the lower rand gold price is going to be the big factor in these results. Going forward, the potential decline in revenues could accelerate if the rand holds at current levels," said Patrice Rassou, resources analyst at Old Mutual Asset Managers.
The rand scaled a new 2-1/2 year peak of 7.23 against the dollar this week, taking its gains against the greenback this year to more than 18 percent and sparking a major sell-off in mining stocks.
Although, most producers managed to cling to gains in the previous quarter the rand's continued onslaught against the dollar this year has piled pressure on mining companies, as they receive a lower gold price in rand terms.
Rand-sensitive gold mining shares have been among the hardest hit, as the robust domestic currency is seen squeezing margins sharply.
Gold Fields, South Africa's second largest gold miner, is seen reporting headline EPS of 112 cents, a 26 percent drop.
Forecasts ranged from 70 cents to 142 cents with output seen mainly hurt by several closures in the period under review during the festive season. Gold Fields reports third quarter results on May 8.
"Traditionally, this quarter is slower than the previous quarter as people are normally slow to return to work after the holiday breaks," said another analyst.
The company, which produces four million ounces of gold per year, has operations in South Africa, Australia and Ghana.
AngloGold cushioned?
Analysts said they would keep a close eye on AngloGold, the country's top gold producer, whose forecasts ranged widely as some bet its diverse operations would somewhat cushion the miner.
AngloGold, is seen posting a 32 percent drop in headline earnings per share to 315 cents. Forecasts ranged widely from 230 cents to 380 cents.
South Africa accounts for just under 50 percent of AngloGold's total operating earnings but it also has operations spanning the rest of Africa, Australia and North and South America.
Analysts said the top producer, whose output was six million ounces in 2002, was unlikely to hold back on plans to lift production to 6.5 million ounces in the next three to four years, despite the strong rand. AngloGold reports first quarter results on April 30.
Harmony, which is one of the least hedged gold producers, is seen hardest hit, hurt by the expected average six percent decline in the rand gold price to about R95 000 per kg from over R100 000/kg.
"Harmony is likely to be hurt by lower ore grades and volumes," one analyst said.
In the previous quarter, Harmony's underground operations recorded a decline in ore grades to 5.2 grams per ton from 5.5 grams/ton with the most significant decline seen at its Free Gold operations — a 50/50 joint venture with black-controlled mining firm ARMgold
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