Cambior''s catastrophe and maybe a way out

12:35a EDT Friday, October 8, 1999

Dear Friend of GATA and Gold:

This Reuters story is interesting for its quoting the
Wall Street Journal's identification of Ashanti Gold's
creditors, who are now holding a very heavy bag of
debt. First on the list is Goldman Sachs.

Please post this as seems useful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

LONDON, Oct. 7 (Reuters) -- Gold prices bounced off the
day's lows in late Europe and dealers said bullion is
likely to trade in a range, awaiting the next big move.

Gold was last quoted at $323.00/$325.00 a troy ounce,
down from New York's close on Wednesday at
$324.00/$326.00.

Dealers said prices lifted from the day's lows around
$315.00 a troy ounce and traders said some participants
still needed to cover their short positions.

quot;It seems to be in a range between $315.00 and $325.00.
It is in a range waiting for the next big move,quot; one
London dealer said.

Gold option volatilities, which indicates market
thinking on future price direction, edged lower on
Thursday. One-month option volatility was last quoted
around 43 percent from Wednesday's 50 percent.

Volatility were sky-high compared to the usual 12 to 13
percent.

Dealers remained cautious about potential losses on
their forward books after gold's surge since the
September 26 pledge by 15 European central banks to cap
gold reserve sales, gold lending and derivatives
activities.

Some gold producers had already suffered losses on
their hedge positions in the wake of gold's rally,
which saw spot prices hit a two-year high of $338.00 a
troy ounce this week.

Fiji gold miner Emperor Mines Ltd reported overnight
that its hedge book value was a negative A$11.5 million
at September 30 compared with a positive A$17.4 million
at June 30.

The fall in value of the hedge book was based on a spot
gold price of $299.55, the company said in its
September quarterly.

Emperor's woes follow the problems suffered by Ghanaian
producer Ashanti Goldfields Co. and the mid-sized
Canadian miner Cambior Inc., both of whose hedge
positions have been hit by the rising gold price.

The Wall Street Journal's interactive edition said on
Thursday that the Wall Street banks with the largest
credit exposure to Ashanti were the Goldman Sachs
Group, $105 million; Societe Generale, $82 million;
Credit Suisse First Boston, $62 million; UBS, $61
million; American International Group, $32 million; and
Chase Manhattan, $25 million.

The higher gold price has brought Ashanti face-to-face
with margin calls for more collateral from its
counterparties. Ashanti and Lonmin Plc said on Tuesday
they were in talks which could see Lonmin secure full
ownership of the Ghanaian mining firm of which it
already holds a 32 percent stake.

Bullion dealers said the market is keeping a close eye
on news about producers' hedge positions.

quot;If there is more news like the Ashanti stuff, gold
could well move up,quot; one dealer said.