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Jim Sinclair''s gold market commentary for Friday, April 2
By James Paton
Reuters
Friday, April 2, 2004
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4740818
NEW YORK -- Smaller gold mining companies from abroad
increasingly are planting their flags at the third biggest U.S.
stock exchange in a bid to draw American investors and
capitalize on the gold sector's rising popularity.
It's not the New York Stock Exchange, the world's largest
marketplace for stocks. But gold miners, many from Canada,
have found that taking up residence on the lesser-known
American Stock Exchange is a good means of courting
respect.
Of the 21 gold miners on the American Stock Exchange, 11
have joined in the last year, according to the exchange, which
lists 559 companies. Some, like Bema Gold Corp.
and Cambior Inc. have traded there for years.
"It's funny. Even though the Toronto markets are
well-established exchanges, there are a lot of investors in
the United States who won't buy Canadian stocks," said
Rudi Fronk, chief executive of Seabridge Gold of Toronto.
Seabridge became the latest gold mining company to join,
announcing earlier this week that the American Stock
Exchange had approved its listing. Fronk said that the stock
will begin trading within a couple of weeks.
The companies bet that a presence in the United States will
allow them to raise more money to pay for projects, and
realize that they will have added credibility once investors
know the U.S. Securities and Exchange Commission is
keeping an eye on them.
Gold companies have benefited from surging prices, brought
on because of a weaker U.S. dollar and investor worries
about the direction of the stock market, the economy, and
terror attacks. They have stayed strong even as stocks
rebounded.
"Gold prices have soared," noted John McGonegal, senior
vice president of equities at the American Stock Exchange
in New York. "That has meant a lot of companies out
there saying, 'We need more exposure,' and they've
looked to the European markets and they've looked to
us down south here."
The exchange also smelled an opportunity, assigning an
official to do "missionary work" in Canada a couple of
years ago to seek out companies and promote the
marketplace.
Among the other gold companies to recently jump to the
American Stock Exchange are Orezone Resources Inc.
Cumberland Resources, and Yamana Gold Inc. , according
to the exchange.
Many already trade in Canada but have listed in the United
States as well to raise their profiles.
A number of the companies probably would not have met
the exchange's criteria for entrance a few years back,
McGonegal said, but their improved financial pictures put
them in the position to make the leap.
"They're in favor now, and if gold goes to 500, 600 bucks,
that's great," he said. But if it doesn't, and gold sours,
"that's part of the risk you take as an exchange."
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NEWS AND ANALYSIS
Free sites:
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http://www.silver-investor.com
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http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
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Eagle Ranch discussion site:
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Ted Butler silver commentary archive:
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