DRDGold is ramping up gold output from surface and underground operations as it looks for project-level acquisitions to grow the company, an issue further down on its list of priorities.
"We are not a one big-deal company. If something is for sale that fits a profile of making money or is close to making money that is not ultra-deep, or a company killer, like we used to own at Buffelsfontein, we would look at buying it," said DRDGold CEO Niel Pretorius.
"We would look to grow our production by way of small, intelligent acquisitions, maybe at project level and not so much at corporate level," he told Miningmx in a recent interview.
However, acquisitions are not top of mind at the moment, with management preferring to focus on bringing its Ergo surface treatment operation into steady state production from September, keeping output disruptions at its Crown and City Deep operations at a minimum and working on ramping up tonnages from its Blyvoor mine.
DRDGold's output is drawn equally from surface and tailings operations. That will change when Ergo hits its stride, with two-thirds of the group's gold coming from a cheaper, safer surface project.
Ergo is forecast to produce 75 000 ounces/year at $550/oz. Crown produced 87 400 oz in financial 2008, at a cost of $553/oz.
"A larger percentage of ounces coming in below $600/oz will soften the impact of those months when underground costs spiral," Pretorius said. "Not only that, but having more surface ounces significantly de-risks the company."
Management wants infrastructure in place to pump material from its Crown and City Deep projects once the deposition sites they are using are full.
"What we want to look at once we achieve steady state production is how quickly we can link Central Rand to the far East Rand in order to perpetuate life of Crown and City Deep," Pretorius said.
"We are in the hands of the contractor there and it depends how nervous they get. We've enough time to finish Top Star, but that might change tomorrow," he said.
"We have enough deposition space on the East Rand to provide for Ergo and Central Rand. I want to get running sooner rather than later on linking Central Rand to Ergo, because I don't want to see an interruption to any of our production."
Read more here
Monday, April 20, 2009
Thursday, April 16, 2009
S.Africa says growth, jobs targets "implausible"
(Reuters) - South Africa's target of lifting economic growth to an average of 6 percent between 2010 and 2014 appears "implausible" due to the global economic downturn, the government said on Thursday.
It will also struggle to meet its aim of halving unemployment.
It added, however, that the government would not yet lower the targets due to the uncertainty surrounding the global recession.
An economic plan formed in 2006, known as the Accelerated and Shared Growth Initiative for South Africa, set out plans to boost growth and cut poverty in Africa's biggest economy.
But the latest annual report of the programme warns the global economic recession, which it says may continue for longer than previously expected, made its goals difficult.
"The result is that the original AsgiSA target of growing at an average rate of 6 percent between 2010 and 2014 now may appear implausible," the report said.
"In turn, the target of reducing poverty by half ... or less in 2010 may appear to be endangered, and possibly also the target of halving poverty between 2004 and 2014."
South Africa's economy expanded by an average 5 percent in the four years to 2007, but growth slowed to 3.1 percent last year, knocked by electricity shortages and slowing world growth.
Read more here
It will also struggle to meet its aim of halving unemployment.
It added, however, that the government would not yet lower the targets due to the uncertainty surrounding the global recession.
An economic plan formed in 2006, known as the Accelerated and Shared Growth Initiative for South Africa, set out plans to boost growth and cut poverty in Africa's biggest economy.
But the latest annual report of the programme warns the global economic recession, which it says may continue for longer than previously expected, made its goals difficult.
"The result is that the original AsgiSA target of growing at an average rate of 6 percent between 2010 and 2014 now may appear implausible," the report said.
"In turn, the target of reducing poverty by half ... or less in 2010 may appear to be endangered, and possibly also the target of halving poverty between 2004 and 2014."
South Africa's economy expanded by an average 5 percent in the four years to 2007, but growth slowed to 3.1 percent last year, knocked by electricity shortages and slowing world growth.
Read more here
Wednesday, April 15, 2009
China keeps hold on commodities reins
(MarketWatch) -- Oil and metals mining shares traded on a mixed note in the Asian markets Thursday, as analysts stressed that China remained a key force that will ultimately decide the fate of demand for most major global commodities.
And while economic growth in China appears to be improving, the outlook remains uncertain.
On Thursday, government data showed that the nation's economy grew a slightly better-than-expected 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter.
Overall, "China continues to walk a very thin tightrope" and growth remains "below the optimal level to avoid major civil unrest," said Kevin Kerr, editor of Global Commodities Alert.
But that also means that "demand for key commodities such as energy and agriculture, industrial metals and soft commodities will continue to be brisk in China as they try to stave off a major collapse by continuing to use every means possible to stimulate the economy and create infrastructure projects," he said.
"China will clearly be the driving force in commodities during this cycle and perhaps for decades to come," he said.
Read more at MarketWatch
And while economic growth in China appears to be improving, the outlook remains uncertain.
On Thursday, government data showed that the nation's economy grew a slightly better-than-expected 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter.
Overall, "China continues to walk a very thin tightrope" and growth remains "below the optimal level to avoid major civil unrest," said Kevin Kerr, editor of Global Commodities Alert.
But that also means that "demand for key commodities such as energy and agriculture, industrial metals and soft commodities will continue to be brisk in China as they try to stave off a major collapse by continuing to use every means possible to stimulate the economy and create infrastructure projects," he said.
"China will clearly be the driving force in commodities during this cycle and perhaps for decades to come," he said.
Read more at MarketWatch
Fiji's central bank devalues currency by 20%
(MarketWatch) -- The Reserve Bank of Fiji said Wednesday that it has devalued its currency by 20%, the same day it appointed a new governor for the central bank, news reports said.
Sada Reddy was named as the new Reserve Bank governor. He said the devaluation was made to the Fijian dollar to cushion the severe effects of the global financial crisis on the nation's economy, according to a report from Agency France-Presse.
The Fiji dollar will now be in line with its major trading partners, such as Australia and New Zealand, the report cited Reddy as saying. The central bank governor also said that correcting the value of the currency will likely benefit exporters and boost tourism.
Read more at MarketWatch
Sada Reddy was named as the new Reserve Bank governor. He said the devaluation was made to the Fijian dollar to cushion the severe effects of the global financial crisis on the nation's economy, according to a report from Agency France-Presse.
The Fiji dollar will now be in line with its major trading partners, such as Australia and New Zealand, the report cited Reddy as saying. The central bank governor also said that correcting the value of the currency will likely benefit exporters and boost tourism.
Read more at MarketWatch
Tuesday, April 14, 2009
Carry Trade Comeback Means Biggest Gains Since 1999
(Bloomberg) -- The carry trade is making a comeback after its longest losing streak in three decades.
Stimulus plans and near-zero interest rates in developed economies are boosting investor confidence in emerging markets and commodity-rich nations with interest rates as much as 12.9 percentage points higher. Using dollars, euros and yen to buy the currencies of Brazil, Hungary, Indonesia, South Africa, New Zealand and Australia earned 8 percent from March 20 to April 10, that trade’s biggest three-week gain since at least 1999, data compiled by Bloomberg show.
Goldman Sachs Group Inc., Insight Investment Management and Fischer Francis Trees & Watts have begun recommending carry trades, which lost favor last year as the worst financial crisis since the Great Depression drove investors to the relative safety of Treasuries. Now efforts to end the first global recession since World War II are sending money into stocks, emerging markets and commodities.
“The global economy seems to have reached an inflection point,” said Dale Thomas, head of currencies at Insight Investment Management in London, which oversees $121 billion. “We’re set for a period of some classic risk currency trades, where you sell the dollar against emerging-market currencies.”
Carry trades use funds in countries with lower borrowing costs to invest in those with higher rates, allowing investors to pocket the difference. Speculators fled the strategy last year as central banks cut rates to revive growth, narrowing spreads, and as currency swings increased risks. Foreign- exchange volatility expectations surged 73 percent in three days to a record on Oct. 24, a JPMorgan Chase & Co. index shows.
Aussie, Real
Thomas recommends the Australian dollar and real in Brazil, where the benchmark central bank rate is 11.25 percent, or about 11 points more than the corresponding U.S. rate.
Borrowing U.S. dollars at the three-month London interbank offered rate of 1.13 percent and using the proceeds to buy real and earn Brazil’s three-month deposit rate of 10.51 percent rate would net an annualized 9.38 percent, as long as both currencies remain stable.
Carry trades were profitable for most of the past three decades. They produced average annual returns of 21 percent in the 1980s with no down years, the best of four commonly used currency strategies, according to ABN Amro Holding NV indexes.
Three Down Years
In the 1990s, carry-trade investors suffered three down years, including a 54 percent slide in 1992, ABN Amro data compiled by Bloomberg show. From 2000 to 2005, the trade was again on top with average gains of 16 percent.
Then it dropped three years in a row in 2006-08, the longest streak since 1976-78, for an annualized average loss of 16.5 percent through Feb. 28. Most of the decline came after June 2008 as the collapse of U.S. subprime mortgages froze credit markets and led to the bankruptcy of New York-based Lehman Brothers Holdings Inc., the biggest corporate failure in history.
As investors fled to the safest assets, the greenback climbed 26 percent between July 15 and March 4, when it reached its highest in almost three years, according to the Intercontinental Exchange Inc. Dollar Index against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona. Prices for Treasuries rose, sending the 10-year note yield to a record low of 2.0352 percent on Dec. 18, from 4.07 percent on Oct. 14.
Read more at Bloomberg
Stimulus plans and near-zero interest rates in developed economies are boosting investor confidence in emerging markets and commodity-rich nations with interest rates as much as 12.9 percentage points higher. Using dollars, euros and yen to buy the currencies of Brazil, Hungary, Indonesia, South Africa, New Zealand and Australia earned 8 percent from March 20 to April 10, that trade’s biggest three-week gain since at least 1999, data compiled by Bloomberg show.
Goldman Sachs Group Inc., Insight Investment Management and Fischer Francis Trees & Watts have begun recommending carry trades, which lost favor last year as the worst financial crisis since the Great Depression drove investors to the relative safety of Treasuries. Now efforts to end the first global recession since World War II are sending money into stocks, emerging markets and commodities.
“The global economy seems to have reached an inflection point,” said Dale Thomas, head of currencies at Insight Investment Management in London, which oversees $121 billion. “We’re set for a period of some classic risk currency trades, where you sell the dollar against emerging-market currencies.”
Carry trades use funds in countries with lower borrowing costs to invest in those with higher rates, allowing investors to pocket the difference. Speculators fled the strategy last year as central banks cut rates to revive growth, narrowing spreads, and as currency swings increased risks. Foreign- exchange volatility expectations surged 73 percent in three days to a record on Oct. 24, a JPMorgan Chase & Co. index shows.
Aussie, Real
Thomas recommends the Australian dollar and real in Brazil, where the benchmark central bank rate is 11.25 percent, or about 11 points more than the corresponding U.S. rate.
Borrowing U.S. dollars at the three-month London interbank offered rate of 1.13 percent and using the proceeds to buy real and earn Brazil’s three-month deposit rate of 10.51 percent rate would net an annualized 9.38 percent, as long as both currencies remain stable.
Carry trades were profitable for most of the past three decades. They produced average annual returns of 21 percent in the 1980s with no down years, the best of four commonly used currency strategies, according to ABN Amro Holding NV indexes.
Three Down Years
In the 1990s, carry-trade investors suffered three down years, including a 54 percent slide in 1992, ABN Amro data compiled by Bloomberg show. From 2000 to 2005, the trade was again on top with average gains of 16 percent.
Then it dropped three years in a row in 2006-08, the longest streak since 1976-78, for an annualized average loss of 16.5 percent through Feb. 28. Most of the decline came after June 2008 as the collapse of U.S. subprime mortgages froze credit markets and led to the bankruptcy of New York-based Lehman Brothers Holdings Inc., the biggest corporate failure in history.
As investors fled to the safest assets, the greenback climbed 26 percent between July 15 and March 4, when it reached its highest in almost three years, according to the Intercontinental Exchange Inc. Dollar Index against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona. Prices for Treasuries rose, sending the 10-year note yield to a record low of 2.0352 percent on Dec. 18, from 4.07 percent on Oct. 14.
Read more at Bloomberg
Thursday, March 27, 2008
McCormick Reports Record Results for First Quarter of 2008 -- Sales increased 11%. Consumer business sales rose 10% and industrial business sales rose 13%. -- Earnings per share reached $0.39. On a comparable basis, excluding rest
... in local currency, led by gains in China. For the first quarter, consumer business operating ... of third-party contracts, the impact of the stock market conditions on its share repurchase program, fluctuations ...
Asian economic and business calendar -- to April 10
... expected to April 10 Thursday March 27 -Japan weekly capital inflows -Hong Kong Feb trade ... unemployment Friday March 28 -Japan Feb CPI, Tokyo March CPI -Japan Feb unemployment rate -Japan ... condition -Malaysia Feb industrial output -Malaysia end-March forex reserves -Czech Feb foreign trade -US Alcoa ...
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