You are here

GATA plans Africa gold conference in Durban in May

Section: Daily Dispatches

By Bob Chapman
The International Forecaster
(posted at
March 3, 2001

One of our operatives in South Africa acquired the
following communication at great risk, and the
contents were so explosive he felt he had to pass it on
to us for publication. As most of you know, I lived in
southern Africa for three years and have never let our
line there fall into disuse.

We think AngloGold could well be complicitous in the
gold price-fixing scandal. The presence of a director of
J.P. Morgan on the board of AngloGold adds to the
seriousness of the allegation. Now that the following
letter has been published worldwide, we hope it will
bring to an end AngloGold's efforts to take over Gold
Fields, at least until it is determined whether there is a
conspiracy. The following communication speaks for

It would be even better if AngloGold CEO Bobby
Godsell would do the right thing and voluntarily
announce that under present circumstances any interest
AngloGold might have in Gold Fields would not be
pursued until the situation is clarified. That way the
company could assist in discovery, which would be in
the best interest of all of us.

* * *

To Mr. K. H. Williams, Marketing Director, AngloGold:

I have followed the GATA/Howe lawsuit very
carefully for some time. Through nominees and
associates we hold a very large number of Gold Fields
shares. It is clear, even to a layman, that it is in the
interest of AngloGold to effect takeovers (that this has
happened and is still happening is a fact) of gold
producers at a low gold price (effectively depressing
the market value of any such producer that is in the
sight of an AngloGold takeover).

The proof in the GATA conspiracy issue is that
AngloGold is snapping up gold producers suffering
under a manipulated gold price and effecting takeovers
at depressed market values.

The GATA conspiracy issue is not circumstantial.
AngloGold's takeover bid for Gold Fields prior to the
discovery process in the GATA/Howe lawsuit, when
an imminent rise in the gold price is in the cards and
will put Gold Fields beyond the reach of AngloGold, is
incontrovertible fact.

The conspirators and the beneficiaries of a
manipulated gold price are acting unlawfully, more
specifically when they continue to do so while these
very serious allegations are being investigated. You
need not be told that the matter is very serious. If the
conspiracy is merely based on circumstantial evidence
as you are alleging, why do you not actively support
the discovery process to get to the bottom of these
conspiracy allegations and discontinue takeover bids
under circumstances created by the conspirators and
manipulators of the gold price?

Surely AngloGold would have no objection to delaying
its takeover bid of Gold Fields until the GATA/Howe
discovery process has been completed and evidence
emerging from this discovery process has been
evaluated. The result of the discovery process will
have a positive effect on the gold price.

This result will not be in the best interest of

But it is requested that AngloGold delay its takeover
bid for Gold Fields until at least after the GATA/Howe
discovery process and the evaluation of the evidence
flowing therefrom. This discovery process will answer
very important questions in respect of the conspiracy
issue around the manipulation of the gold price. (Since
your own views are that the evidence of a gold price
manipulation is circumstantial, wait for the process to
be completed.)

If AngloGold makes a bid for Gold Fields and benefits
from an unlawful gold manipulation process,
AngloGold would be acting illegally to the prejudice
of others. Any attempt by AngloGold at this stage to
proceed with its takeover bid for Gold Fields would be
irregular and is objected to.

Your e-mail forwared to Chris Powell of GATA has a
sinister objective that is patently transparent.
AngloGold has benefitted and still is benefitting from
a manipulated gold price, enabling it to move on Gold

J.P. Morgan is no stranger to AngloGold.

This statement will further be elaborated on in due
course in the appropriate forum, if necessary.

AngloGold is hereby informed that should it proceed
with the takeover bid for Gold Fields at this stage
(prior to the GATA/Howe discovery process and the
evaluation of the evidence flowing therefrom) and
when the gold price is manipulated for the undoubted
benefit of AngloGold, legal proceedings will be
instituted against it to block any takeover bid for Gold
Fields, alternatively for legal proceedings to recover all
damages from AngloGold and its directors in respect
of an AngloGold takeover of Gold Fields at a deflated

AngloGold will have the opportunity to answer
questions under oath in a South African or
international court through which legal proceedings
will be instituted. That AngloGold is urgently pursuing
its takeover bid of Gold Fields at this stage (low gold
price and low share price) and before the discovery
process in the GATA/Howe lawsuit makes nonsense of
your assertion that there is only circumstantial
evidence of conspiracy.

The answer to your allegation is obvious. Why doesn't
AngloGold wait for the discovery process and evaluate
the evidence that will flow therefrom? Should any
evidence from the GATA/Howe lawsuit confirm a
conspiracy and manipulation of the gold price and that
may directly or indirectly be linked to the benefit of
AngloGold, the rights of all relevant and affected
shareholders of Gold Fields (covered by this
communication) are expressly reserved to institute the
necessary and appropriate legal proceedings against
AngloGold and its directors and agents should
AngloGold proceed with the takeover bid of Gold
Fields at this stage and under the circumstances as
herein set out.

We fully support GATA and Mr. Howe in their

Mr. Williams is on record that AngloGold benefits
from a low gold price, which comments and activities
support the allegations made against AngloGold in
respect of the manipulated gold price.

Since AngloGold is aware of the allegation of a
conspiracy affecting the gold price (GATA/Howe
lawsuit), any business activities conducted by it under
such circumstances, specifically where it benefits the
therefrom, would result in AngloGold's acting
unlawfully, being part of an unlawful conspiracy to
manipulate the gold price.

J. van Zyl
Swissbourgh Group
P.O. Box 1313
Bedfordview 2008
South Africa
Tel: 011 450-2433
Fax: 011 450-1545

* * *

Significantly, the unlisted Japanse investment fund
Jipanqu Inc. is to acquire a 21 percent interest in
Harmony Gold, South Africa's third-biggest gold
producer. Eight percent will be bought by the end of
April and the remainder later.

On February 2 gold short positions were at a five-year
high of 66,731 contracts. Funds had been selling
relentlessly since the beginning of January, believing
the 20-year low of $252 an ounce would be broken. At
the same time gold lease rates for periods of six
months and less have climbed from less than 0.5
percent to 4.68 percent, reflecting a shortage of gold
available for leasing.

Banks are not replacing short-term lease loans with
longer-term loans, which forced those who borrowed
gold and sold it to repurchase that gold rather than
rolling those short positions forward. If lease rates
could be sustained at current levels for at least 10 days,
that would support enough covering of shorts by funds
to lift the April price to $275 an ounce, preparing the
way for a rally that might compare with the one seen in
October 1999, when prices spiked to a high of $340 an

There obviously are merger discussions going on
between AngloGold and Gold Fields, and supposedly
a $5.50 bid is on the table, which is a 30 percent
premium over the current price. We see no reason for
Gold Fields to be taken over with a rising gold price
and an unhedged position. If we were Gold Fields
shareholders, we wouldn't be happy with a paltry 30
percent premium.

The gold price in Australian dollars is 512 just below
the high of 522. The hedge books of Aussie producers
will shortly be in trouble. Higher gold prices will put
some of these highly leveraged companies out of

Our spies tell us that early on Wednesday, February 28,
the Bank for International Settlements (BIS) lent gold
bullion to a group of bullion banks to allow them to
depress gold prices and drive leasing rates back down.
This is typical of the market manipulation that has
been ongoing since at least 1994 and probably since

Central banks are not rolling over their two-year
leases, and short covering is going on and being aided
illegally by the BIS. All they are doing is bailing out
the bullion banks. In addition, with lease rates at 4-5
percent, the cost of holding short positions is much
more expensive.

The Australian miners are hedged to the hilt, and a
move to $290 an ounce gold would put them and the
market in a terrible bind. The production shortfall will
get worse in the months and years ahead.

If the total short position is, as we have stated for the
last year, 15,000 to 29,000 tons, any production
stoppage could cause chaos on the upside. No matter
what, five years from now gold will be selling at what
we consider today astronomical levels. No matter what
the forces of evil do, they will not win. We are in for a
long wild ride as gold seeks ever-higher levels.

We estimate that 2001 earnings for Meridian gold will
be a disappointment. Reserves are of the short-life
variety. We'd switch to another gold stock ahead of the
pack if you own it. You could try Agnico-Eagle
(AEM-NYSE). Crystallex (KRY-ASE), and Kinross
(K-TSE). By the way, be very careful in reading
research reports and gold and silver stock
recommendations. Most of the writers don't have a
clue as to what they are writing about.

There is something big brewing behind the scenes
regarding the central banks and gold. Gold lent to
Turkey cannot be recovered because climbing interest
rates and the devalued lira have crippled borrowers
who depend on a stable gold conversion rate. Lenders'
exposure has increased exponentially after they were
unable to secure alternative short-term supplies. The
Bank of England refuses to confirm that it is
overexposed to bullion banks and hedge funds
connected with Turkey. Rumor has it they don't have
the physical gold to meet future reserve requirements
to have their final March sale.