South African Dilemma!

URGENT UPDATE. SEE MINING NEWS IN THE SIDE BAR The ANC has been in power for 23 years with out any serious rivalry from other parties. No...

About Me

Retired but always looking for new challenges.

Tuesday, April 27, 2010

For the beginning of May

        Well things have come full circle as far as GOLD  goes.From being at the height of popularity in the nineteen seventies ,then out of favour through the eighties and nineties and almost the whole first decade of the new centuary.
       America and Europe tried to sideline GOLD with  what they called" paper gold" .That is they printed more notes when ever any country needed more cash and then called it a loan.Trouble that paper had no backing.The GOLD price languished and sank back. In the early eighties,when the Bretton Woods  agreement  finally broke down gold slowly climbed at first from thirty eight Dollars an ounce then started shooting up  to a heady  US $850 PER OUNCE , then all manner of interference was sought to bring the price right down and replace it with the paper gold.
       Most of the governments still have managed to instill in their citizens that gold is archaic and has no place in monetary policy and yet one might wonder why every government in the world keeps increasing their store of this"relic"in their vaults.
       The most telling thing is that citizens in the PI IGS(PORTUGAL,ICELAND,IRELAND,GREECE and SPAIN) countries keep buying GOLD AND SILVER COINS !.
In an interveiw with a couple of citizens in those countries ,every one said that their governments devalue their currencies in an ongoing exercise from time to time making their currency almost worthless,so its nice to have gold under their pillow that has a stable price and can be sold world wide. Some countries are in such a bad way they call in all the old notes in just a couple of days,leaving the poor citizens with barrelfuls of worthless notes,which they are unable to exchange in time as usually not enough new notes are printed.This is the also case in Africa. In many countries it is illegal to own gold except in coin form.
 Now on the 28/4/2010 Greece's currency has been downgraded to junk status as there is still doubt that they will be able to meet their commitments on the 19  of May and Portugal also has had a lesser down grade.The trouble is this can cause contagion  a very serious situation.
 Speaking of which HARMONY which has been a laggard over the last couple of years running third behind Anglogold and GFI as they have been working mostly older almost worked out sections OF WHICH THEY THEY HAVE NOW CLOSED THREE LOSS MAKING SHAFTS THIS MONTH ,has in conjunction with Newcrest of Australia opened a first class mine in Papua New Guinea in the hidden valley area which can shoot them up to second place and which they can mine profitably and this is a long term project that is likely to put them on the map for at least the next thirty years. HARMONY's CEO Graham Biggs says that the working costs of the new venture are about $350 per ounce,so yes a highly profitable venture.They are also busy with the Grasberg venture in South Africa,which is fairly large new area.They have finally managed to take over the PAMODZI mine and this will add to their production.
    Now as for PLATINUM,there is expected there will be a shortage during  2011 as demand increases and mothballed mines cannot be easily set in motion again.So expect the re-opening to take an avarage of about twelve months ,by which time the demamnd is likely to increase even further.
Now as far as ANGLOPLAT(AMS) goes  it has not produce any dividend since its Interim in Jul 2009.In this case the PE ratio shows wrong @ 278 ,which is nonsense!
   The seven concensus  forecasters ,think that dividends are likely to be resumed,which is my opinion as well.
They rate Angloplat as follows
All in cents
                                    31 Dec 2010 ,    31Dec 2011     
 Dividend per share        933                     1937                    
 Earnings per share       2197                     3721               
 Now these figures were worked out when the Platinum price was around $1600 PER OUNCE/The prices are continuing to move up at a steady pace and the Rand is weakening slowly all of which should lead to a double whammy!

        With the loan from the IMF for building a new power station and revamp or other coal powerstations.Therefore coal will remain one of the foremost minerals sought after.Rather look to the larger establishents for production.As the mining houses (BIL,AGL,Xstrata)hold most of these in their large portfolios there is little available for ordinary share holders to get hold of. The best largest holder of coal and mineral sands is  EXXARO (EXX) whichis still worth  a punt( in my opinion only)

Do read the past posts as they still carry relavant information      and use the labels to find what you are looking for.