Browsing by Subject "Gold industry"
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Item Major developments in the gold mining industry of the United States(1988) Howe, Roger Relf, 1958-; Van Rensburg, W. C. J.The domestic gold mining industry has changed substantially as production has increased sharply since 1980. This thesis seeks to review the fundamental economic and technologic changes contributing to increased production and to present an analysis of the components of present mine supply. The sustained higher gold price in real terms has been the driving force behind rapidly increasing domestic gold production. Developments in open pit mining methods, heap leaching technology, and carbon-in-pulp technology have contributed to lower production costs. Higher prices and lower costs have resulted in very attractive profit margins, enabling the industry to raise substantial capital to develop new mines through equity offerings and gold loans. Numerous discoveries of large-tonnage, low-grade deposits in the Western United States, particularly Nevada, have resulted in many major mines commencing production since 1980. Nevada has rapidly become the dominant gold producing state, providing nearly 56% of total domestic output in 1987. The Carlin trend in northeast Nevada is now recognised as the largest proven gold belt in the western hemisphere. The other major gold producing states, in order of descending 1987 production, are California, South Dakota, Montana, Washington, Utah, Colorado, and Alaska. The U.S. gold mining industry has undergone a rapid transformation during the 1980's as production has boomed. Only four of the Nation's twenty largest gold mines in 1986 were opened before 1981. Newmont Gold and Homestake Mining are by far the largest domestic gold mining companies, with estimated 1988 production of 930,000 ounces and 560,000 ounces, respectively. Foreign investment in the U.S. gold mining industry has sharply increased since 1980. A major gold mining boom has been gathering momentum in the United States since 1980 as domestic gold production has increased from slightly less than one million ounces in 1980 to 4.52 million ounces in 1987. The U.S. is currently the third largest gold producing country in the world, behind only South Africa and the Soviet UnionItem Price hedging and its value to gold producing companies(1994) Franks, Richard Lee, 1963-; Parrino, Robert, 1957-; Van Rensburg, W. C. J.Gold price volatility has created a market for securities based on gold price. This liquid market has afforded gold company managers an opportunity to hedge, or reduce, the risk arising from gold price movements. Typical price hedging instruments include forward sales contracts, futures contracts, options, and gold loans. The question addressed in this thesis is whether price hedging adds value to companies using it. Several areas are identified where hedging might have some effect on company value. They include cost of capital, operating costs, and investment decision making. Of these, the cost of capital appears to be most important. Hedging may result in cheaper debt, but some evidence indicates that the investor's required rate of return as calculated by the CAPM and beta is increased by hedging. If the CAPM holds, the company's market value could be reduced. The result is that companies evaluating an existing hedging policy or those considering implementing a policy have to determine individually whether hedging pays off. Recognizing the possible detriment to company value and knowing the potential sources of added value allows the investigator to make informed decisions concerning the costs and benefits of a hedging policy