From Canada, New Roads to Gold

(FROM THE N.Y.TIMES):

From Canada, New Roads to Gold

By BERNARD SIMON, TORONTO

SENSING a renewed appetite among Americans, a small army of foreigners
is invading the United States with new kinds of gold investments.

Ten small and midsized Canadian gold producers have been listed on the
American Stock Exchange in the last year. The World Gold Council, a
promotional group based in London, is awaiting approval from the
Securities and Exchange Commission for a new exchange-traded fund backed
by gold bullion.

A similar fund was set up this summer on the Toronto Stock Exchange by a
Canadian group with significant participation from American investors.

"When gold gets moving, there's nothing like it," said Ilja Graulich,
general manager for investor relations at Durban Roodepoort Deep, a
South African gold producer that also has interests in Australia and
Papua New Guinea and is listed on the Nasdaq. "It's very easy to get
hold of money at the moment," he said.

Gold is a part of many investors' portfolios, whether in the form of
bullion, coins or shares of the companies that produce it. While the
price of gold occasionally bursts higher on fear of runaway inflation,
political instability or turbulence in financial markets, it has yet to
come close to its peak, in January 1980, when it reached $850 an ounce.
Gold investments were a big disappointment for much of the 1980's and
90's.

Investors in gold and the mines that produce it have done well in the
last year. The metal was trading at $377 an ounce on Friday, about 18
percent higher than its 2002 average of $309. It briefly topped $380
this year, before the war in Iraq began.

The Amex's Gold BUGS index has soared 86 percent from its 52-week low,
reached in October. (BUGS stands for basket of unhedged gold stocks.)
The Philadelphia Stock Exchange Gold and Silver index, which includes
some companies that hedge part of their output, has chalked up more
modest gains, rising 17 percent so far this year.

American gold funds are reporting substantial inflows. "We're having our
best year in quite some time," said Joe Foster, who manages the Van Eck
International Investors Gold fund. The fund's assets have grown by 60
percent so far this year, to $250 million, with inflows from investors
accounting for about three-quarters of the increase.

John C. Hathaway, manager of the Tocqueville Gold fund, said that the
fund's asset value had grown more than 50 percent in the last year, to
about $293 million. The rising prices of its holdings accounted for less
than one-fifth of the increase, Mr. Hathaway said, with inflows making
up the rest.

Big gold producers like Newmont Mining of Denver, AngloGold of South
Africa and Barrick Gold and Placer Dome of Canada, have traded on the
New York Stock Exchange for years.

The 10 Canadian companies that have been listed on the Amex in the past
year include the Iamgold Corporation, Northgate Exploration, Wheaton
River Minerals, the Minefinders Corporation, the Eldorado Gold
Corporation, the Miramar Mining Corporation and Great Basin Gold. The
most recent was Gammon Lake Resources of Nova Scotia, listed on Aug. 29.

"We're hearing from the companies that now is the time when they can use
the increase in the gold price to gain access to the United States
capital markets," said John McGonegal, vice president for equity sales
at the Amex.

The exchange has assigned one of its sales representatives to Canada
virtually full time to attract listings and is sponsoring two
conferences on gold this year. Officials of International Investment
Conferences of Miami, which is organizing the events, said 252 analysts
and fund managers had registered for one of them, to be held this week
in New York, roughly double the number last year. About 3,000 individual
investors are also expected to attend, a fifth more than last year.

Jon A. Douglas, the chief financial officer at Northgate Exploration,
says that overall trading volumes in the company's stock, which was
already listed in Toronto, have more than doubled since it was listed on
the Amex on July 11. Trading on the Amex has accounted for 31 percent of
Northgate's daily volume.

Barry Cooper, a metals analyst at CIBC World Markets in Toronto, wrote
in a recent report that the stocks of smaller gold producers had become
more attractive partly because of the weak financial performance of some
large producers, despite higher gold prices. Mr. Cooper singled out
Eldorado Gold and Cambior, which also trade on the Amex. On the other
hand, he called Minefinders and Wheaton River "underperformers."

Mr. Hathaway, the fund manager, said, "People didn't know about a lot of
those stocks a year ago; now they do know them."

STILL, Barry J. Landen, vice president for corporate affairs at
Agnico-Eagle Mines, a Canadian gold company listed on the New York Stock
Exchange, said that while investor interest was high, most of it was
coming from familiar faces. "We want to see some new faces," Mr. Landen
said.

In another move to expand choices for investors, the World Gold Council
applied to the S.E.C. in May for approval to list its Equity Gold Trust,
an exchange-traded fund, on the New York Stock Exchange. Richard
Simonelli, a spokesman for the council, said, "Hopefully, sometime in
the fall, we'll have a better understanding on the timing of the
rollout."

A similar exchange-traded vehicle, Central Gold Trust, listed on the
Toronto exchange through a public offering in July. The trust's
president, Stefan Spicer, said that the 207 gold bars backing the trust
were stored in the vaults of the Canadian Imperial Bank of Commerce and
were not pledged as collateral on any loans.

The trust has also said it will buy more gold whenever it issues new
units so as not to dilute existing shareholders' interests.

Mr. Spicer said investors outside Canada had bought about 20 percent of
the units. "The amount of interest in the United States has been very
significant," he said. The trust's units are trading at about 23
Canadian dollars ($16.79), compared with the issue price of 20 Canadian
dollars.

Of course, the performance of all these investments ultimately depends
on the price of gold.

The current popularity of gold has stoked the exuberance of gold fund
managers, newsletter publishers and others. Mr. Hathaway concluded in a
recent article that "neither the stock or bond market is capable of
delivering anything close to the returns of the last 20 years."

"Once investors `get real,=B4 " he added, "they will migrate from paper
to tangible assets."

Not everyone shares such enthusiasm.

Observing that the gold market has its share of eccentrics, who tend to
interpret a small rise in prices as the start of a major bull run, Mr.
Graulich, the South African executive, said that "half the gold stocks
are discounting a price of between $450 and $475 at the moment." If the
price fails to reach those levels, investing in these stocks could lose
much of its present allure.=A0

Copyright 2003=A0The New York Times Company

Yes by all means buy GOLD stocks theres nothing like getting in on the
bubble and watching it burst underneath you. F%cking spammer.

OOPS forgot the smiley face on my previous post : )

Ed---

I hope you weren't referring to me as a spammer.

I reprinted the article strictly FYI.

I hold no gold stocks, nor would I buy any (nor advise people to buy or
not buy).

I am only interested in coins.

Everything I've ever read about gold mining companies, gold-stocks and
their purveyors, gold-backed-IRA's, etc., etc., has made me quite leary
of such organizations (and their schemes), and convinced me that there
is a great amount of institutional manipulation of gold prices.
Not only by these commercial institutions, but by their well-greased
government collaborators,
in BOTH the USA and Canada.

My interest in the NYTimes article (--BTW, I read the NYTimes,
religiously, every day--) was only in how this recent development
affects coin collectors.
Many collectors of gold coins can read between the lines and often find
such articles very informative.
(Remember-- not everyone collects mis-struck pennies).

My take on the article was that it's author was, if not totally
skeptical of such stocks, certainly not sold on them.

After all, the NYTimes isn't the FOX News Network, and the article's
author is no eBay 'power-seller'....

If you read the article as somehow being "pro"-gold-stocks, I think you
might try reading it again-- this time, a bit closer.

If you were just joking-- then please excuse me.
I am just explaining my view of the news item.

I didn't see any humor in the situation.....

joey

I was just joking dude : ))

I'd actually like to see more stuff on here about precious metals,
insomuch as they are directly related to bullion, and some of us here
are bullion collectors primarily.

For what its worth, I've got a decent hunk of change invested in
Richmont Mining on the AMEX, which is one of those Canadian miners.
Not that I'd advise anyone else to do it, I bought in at a hair over
$3 a share and those days are long gone.

The problem with Canadian coins is that there are far too many commemeratives.
Not the 37 circulating quarters, but the fact that there are over a hundred
designs and most of them are set-only peices of extremely limited mintage.

The Canada post office at the Eaton center in Toronto was selling a =2003=
coronation jubilee comemerative set for NINETY BUCKS!!!! That's the ISSUE
price. Sheesh!!!!

This is worse than the Shrek pseudo-coins.

eric l.