Think some are spooked away from Oz gold miners a bit by the fall in the $US gold price. Part of that is a bit of a rise in the $US itself, but the fall in Us terms, about 7.5% roughly from its near peak about US $1950, more broadly, is cancelled out in $A terms by a 6.5% approx. fall in the $A from about 78.5 to 73.5 c US. So in practical terms, the revenue lost by the gold miners is negligible here from the fall in the $US gold price. I think we are going to see financial results quite a bit better than a more superficial reaction would suggest. Effectively they are getting the same money for the gold in $A as they did when gold was in the mid $1900-2000 range.
The lads in the foreign currency trading floor in NY know S.F.A. about Australia and think we are mainly a gold producer. I had to brief a representative of the famed Hudson Institute some years ago, when I was at the ABS, and I kid you not, he had no idea Australia was a major iron ore and coal miner in the seaborne trade. Yet the Aust. govt was employing them to get an outside overview of the Australian economy and future. Yep. I was able to give him a potted picture in about 15 minutes that really broadened his view. He went back to report and suddenly there was a wave of US banks waning to set up here to finance huge mining developments etc.
WGX Price at posting:
$1.78 Sentiment: Buy Disclosure: Held
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