Next auction, more on hedging, and Golden View


11p EST Monday, November 22, 1999

Dear Friend of GATA and Gold:

After sending to you yesterday Adrian Day's essay
about hedging in the gold mining industry, dated
November 18 and taken from Adrian Day's Global
Analyst, I noticed some posts at Internet bulletin
boards attributing Day's hedge ratings and stock
recommendations to GATA.

The same kind of thing happened the other day after I
dispatched one of GATA Chairman Bill Murphy's "Midas"
essays written for his subscribers at his web site, Some people remarked that
GATA was recommending a company because Murphy
had mentioned it favorably.

Of course some months ago people remarked that GATA
had gone over to the evil side because I posted my exchange
with the renowned gold bear, Martin Armstrong.

I don't expect that these misunderstandings are common,
but maybe I should put something on the record, as follows.

GATA's purpose is to expose manipulation of the gold
market, to help restore gold's traditional monetary
functions in the world economy, and thereby advance
economic justice. Our purpose is not to recommend

But GATA's supporters are interested generally in the
direction of the gold market, and sometimes financial
commentary by various analysts involves issues related
not only to the gold market generally but to hedging
particularly. Further, GATA has concluded that excessive
hedging by gold mining companies facilitates manipulation
of the gold market. So, as you might expect, for political
reasons we are more favorable to less hedged companies.
Of course whether being less hedged makes a company
a more profitable investment in the short or long term
remains to be seen.

So, in short, if I think an essay or a news story might
be of interest to GATA supporters, I send it along to
you, trusting that it will be read by big boys and
girls who have the sense to take it for whatever it's
worth -- simply something possibly of interest, or
advancing the gold cause, GATA's educational
purposes, and the committee's idea of economic

If GATA wants to endorse something, it will do so
clearly and forthrightly, as we already have done.

Along these lines, I received today a letter from
Bernard Swanepoel, chief executive of South Africa's
Harmony Mining, describing that company's policy
of not hedging, and I'll share it with you below. GATA
agrees with Swanepoel's conclusions about the gold
industry's sometimes being its worst enemy.

Please post this as seems useful.

Gold Anti-Trust Action Committee Inc.

* * *

Statement By Bernard Swanepoel
Chief Executive, Harmony Mining, South Africa
November 22, 1999

Harmony Mining is not involved in any hedging activities.
This has been our policy in the past and we do not see
any reason to change our view. As a company we have
always been focused on managing the total costs of our
operations, which, if managed well, allow for decent
earnings and dividends.

During the September quarter when the gold price
received by the company was the lowest in years --
$264 per ounce -- Harmony still made profits, as total
costs were only $242 per ounce. Why consider
hedging under these conditions?

We believe that our shareholders buy our shares exactly
because the company is unhedged. To change our
strategy at this time when we are bullish on the gold
price does not seem to make sense.

I hope the above helps to clarify our position on
hedging. It does seem strange that after gold producers
and shareholders have been waiting for quite a while
for the gold price to recover, when it eventually does,
some gold producers have liquidity problems and
their share prices go down. These are strange markets
and strange times. Gold producers seem to be the
cause of their industry's becoming unattractive as a
investment sector.

Should you wish to use our views on hedging in your
documents or reports with interested parties and
support groups, feel free to do so.

Harmony never was in a position where we were
hedged either by choice or through the influence of
the bullion banks in return for debt facilities. So there
was no need for us to buy back or close positions as
was the case for other producers.

Thank you for the support given to gold producers at a
time when we probably needed it most.