Liechtenstein fund prepping for $600/oz gold
By: Gareth Tredway
Posted: '30-AUG-05 07:00' GMT © Mineweb 1997-2004
JOHANNESBURG (Mineweb.com) -- The €55-million Top Gold fund in Switzerland has increased its South African gold exposure over the last few months to 35% of its total funds invested. This is according to one of the funds managers, Jean-Pierre Schumacher, who says Top Gold believes gold will hit multi-year highs next year.
“Gold will hit $600/oz next year, whether it hits $500/oz before the end of this year, we’ll have to wait and see.”
Schumacher points out that global economic and political factors will continue to deteriorate into next year. At the same time, he says, “Asia remains a big buyer.”
In September, GFMS in London, is due to release its update on gold demand, while Paul Walker, the chief executive, recently told Mineweb that demand out of the East remains robust.
Schumacher adds that another key fundamental pushing gold higher is the new recovery highs reached by the yellow metal versus the world’s major currencies, with all gaining around 10% in the past few months.
In Swiss francs, gold has shot above the F550/oz level from around F500/oz in February. In yen gold is trading around ¥48,000/oz from below ¥45,000 in January. In euros, gold is hovering around its June 23 high of 366/oz, compared to 330/oz earlier in the year.
If one looks at the oil:gold ratio it also suggests a much higher gold price is required to match the oil price jump, or it could suggest that oil is overpriced.
Ferdinand Lips, the other manager of the fund, is a non-executive on the board of Western Areas, one of the three Kebble companies that are under shareholder pressure to restructure. The other two are JCI and Randgold & Exploration.
Schumacher says that being an investment fund, Top Gold does not get involved in the politics of these companies. Plus they only make up 3% of the fund combined. “Despite this I think there is tremendous value in those companies, but the communication to shareholders is below average,” says Schumacher.
Lips sits on the boards of uranium and gold hopeful, Aflease. Schumacher is a non-executive director of gold junior, Simmer & Jack.
Schumacher says the biggest potential Top Gold sees is in Simmer & Jack (Simmers). “We see Simmers as one of the biggest opportunities since Randgold Resources was born,” says Schumacher.
Simmers recently arranged a $10 million financing and royalty deal with Canadian listed Aberdeen to purchase the North West gold mines that DRDGold liquidated earlier this year. Schumacher explains why the money came from North America. “I think Canadian investors react faster to the potential in South African assets than others do,” he said, “It takes people time to understand the importance of a good deal.”
Top Gold currently owns 27% of Simmers, after it entered a scrip lending arrangement with JCI and the Simmers rights issue was complete. In an announcement last Thursday, Simmers said it is now 32.9% owned by European gold funds.
Another Swiss fund is the Rand Fund, a SwFr10-million fund investing in South African and African gold and platinum miners. Nearly a quarter of the fund is invested in American listed Centurion gold, a junior gold producer that recently said it had received a takeover offer from an unnamed company for double its shareprice.
No word yet but sources say an announcement is due out within a couple of weeks.
The next biggest shareholding in the fund is Harmony Gold, making up 17.8% and Gold Fields making up 8.1%.
The rand fund forecasts a R3,200/oz (R102,882/kg) gold price by year’s end.
Das Geld aus meinen Verkäufen (PAAS und SLW) ist aber schon längst wieder reinvestiert.