GATA makes Dow Jones wire again

Section:

3:45p Friday, May 21, 1999

Dear Friend of GATA and Gold:

This Reuters dispatch about Newmont Mining's
opposition to hedging may be of interest.

CHRIS POWELL
Secretary, Gold Anti-Trust Action Committee Inc.
(GATAComm@aol.com)

* * *

By Patrick Chalmers

LONDON, May 21, 1999 (Reuters) -- Newmont Mining
Corp. is not about to start hedging its gold
production despite this week's fresh 20-year lows on
the London fix, a senior executive told Reuters on
Friday.

"We are virtually unhedged. The demand
fundamentals continue to be good," Chief Financial
Officer Wayne Murdy said on the fringes of the World
Gold Council's annual meeting. "In our view, you
do not hedge at the bottom of the market," he said,
adding that the Denver-based gold producer had
projected cash costs of under $180 for 1999 with
total costs of less than $240.

"We think the cycle will turn and when it does there
will be a huge upside in our stock price," he added.

Murdy said Newmont was "frustrated" at Britain's
recently announced plans to cut reserves from 715
tonnes to 300 tonnes over the next few years. "Gold
is meant to be an asset of last resort. We are a
little perplexed by the sale," he said.

Low gold prices and signs of strength in the
Canadian, South African, and Australian currencies
versus the dollar meant miners in those countries
faced growing pressures. "The total cash costs in
the industry have come down dramatically over the
last couple of years but they have largely come down
because of softer currencies," he said.

"Now we are starting to see some strength in the
Canadian and Australian dollars, we could see that
currency changes have had the effect of masking the
lack of real efficiencies having been squeezed out
by the industry," he said.

"If people's costs start to creep back up then we
are going to see things happening," he said, adding
that one possibility was for mine company
consolidations along the same lines as had been seen
in the oil industry.

On another issue, Murdy said Batu Hijau, Newmont's
copper and gold project in Indonesia, was now 90
percent complete. "Capital costs are going to
come in under budget. It looks like that's going to
be a very good low-cost mine," he added.

-END-

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