The XAU appears to be on its next leg up. Purchasing un-hedged mines are your best bet considering the price run-up on gold can very well destroy companies that are heavily hedged.

Here are a few companies, that as far as we know, have either low or no forward positions. (un-hedged mines) We warn you, that if you want to purchase these issues, that you personally call the company to double check our research. We are here to try to help, but we don't have all the answers, just most of them. Those with no hedge positions that we know are: Battle Mountain, Buenaventura, Freeport MacMoRan, Harmony, Agnico-Eagle and Goldcorp. Those with some leverage: Homestake - position unknown, Kinross 12%, Anglogold 11%, Durban Deep 5%, Gold Fields 2%, Western Areas 2%, Glamis - position unknown, Meridian 11%, Kidston 13%, Iamgold 5% and Randgold 5%.

(HEDGED MINERS)

Gold hedging by producers is not surprising. Bema has hedged for 2.3 years, but at the same level as Barrick, $385. an ounce. If prices are higher they'll be losers. Even if companies' forward sales and put options to cover come out even the mines will have made no money. We wrote a long article about this in 1992. Approximate hedged positions are as follows: Barrick 3.9 years, or 26% of reserves; Cambior 4.3 years, or 52%; Echo Bay 2.5 years, or 23%, Kinross 0.9 years, or 12%; Placer Dome 2 years, or 19%; Bema 2.3 years, or 14%; Eldorado 2.8 years, or 28%; Meridian 3.8 years, or 11%; Teck 2.5 years, or 33%; Ashanti 7.4 years, or 49%; Randfontein 1.6 years, or 20%. Australia is unbelievable, Acacia 4.7 years, or 73%; Delta 2.3 yrs., or 47%; Goldfields 4.4 years, or 54%; Lihir 3.9 years, or 21%; Newcrest 9.5 years, or 81%; Normandy 7 years, or 91%; Sons of Gwalia 8.9 years, or 113%. These and many more issues should be avoided if hedging is above 20% of reserves. That doesn't leave much to buy does it? Can you see the massive mismanagement. Shareholders sue the #@#@ out of the officers and directors, personally.

-- flierdude (no@spam.com), October 19, 1999

Answers

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-- A (A@AisA.com), October 20, 1999.

Thanks Mike,

not at all sure about stocks - have got out of deeps and harmony and gold fields...

remember - this is a y2k forum - the potential for computer meltdown of all markets, banking systems is very high...

better to own physical IMHO...

if/when the dust settles in 2000 by all means get back on that GOLDBULL :)

just my 2c

-- Andy (AUVENGER@cs.com), October 21, 1999.