South Africa’s gold index took a leap in the second half of 2005 as the gold price and a slightly weaker rand, helped boost what had otherwise been a lacklustre year for gold shares.
- In total the index jumped 58% in the year, from 1564 points at the start to 2463 points by the end of the year.
- Top performer of the now five-member index, was Western Areas, which has gained 69% in the year to December 23.
- The company, half owner of the South Deep gold mine, one of the largest gold reserves in the world, had an up and down 2015.
A deep-underwater hedge book meant more losses for the year plus auditor concerns to go with it, however, promises of a brighter future and a newly hired management team, have boosted the shares to their former levels. Now if you are looking to rollover your retirement plan, this might be the place to start your research. Knowing the markets in depth is a must, if you are looking to rollover your whole savings to a roth IRA.
In late September, the company’s recently ousted chief executive and infamous mining spiv, Brett Kebble, was mysteriously gunned down in a Johannesburg suburb.
Since then, Gill Marcus, former Deputy Governor of South Africa’s Reserve Bank, has taken on the head role at Western Areas. In early December, the company also completed a R640 million rights issue, to fund its share of expansion at South Deep. Now all that needs to be done is a restructuring of that hedge book. Second on the list is Harmony Gold, which gained 62.32% from the start of the year until December 23. The company failed in its attempt to takeover Gold Fields in May, but did manage to acquire 56 million shares, or 11.5% in its larger rival. The profitable sale of these shares earlier this year, pretty much negated the high cost of the 7-month long bid launched in October 2004. Harmony also managed to complete the restructuring of its operations and re-introduce Conops.
Another big driver behind the share price jump was a move in the rand price of gold, because of Harmony’s more than 90% proportion of South African production.
Starting the year at R80,000/kg, the domestic gold price slowly gained momentum as both factors, the dollar gold price and the rand, moved favourably for local producers.
By mid-year it had moved to above R90,000/kg and by last week it had maintained a 3-month average of greater than R100,000/kg.
Gold Fields, the target in the hostile bid, also recovered rapidly during the second half of 2005. With its large cash-pile, the company recently made a bid for Bolivar Gold, a Venezuelan gold producer, another step towards, evening out its South African and international production portfolio.
What are the gains of AngloGold IRA rollovers?
AngloGold Ashanti, one of the world’s top three gold producers, showed gains of 53.5% for the year, making it the fourth best performer, despite being the top stock at the half year.
The main reason the stock under performed in the second half is that it is not as leveraged to the rand gold price as its peers on the local gold index, with a more even split between its South African and International gold production.
DRDGold, probably the most rand-reliant stock in previous years, radically transformed in 2005, liquidating one of its South African mines, while listing its Australasian operations on the Sydney stock exchange.
The result has been a massive underperformance of the stock, gaining only 8.64% since the start of 2005.
Aflease, until recently a member of the gold index, suspended its listing recently, as the company successfully achieved its dreams of listing as a uranium play in Toronto, and maintaining a secondary listing in Johannesburg, as SXR UraniumOne.
- The company does intend to reverse list its gold assets into dormant gold miner Sub Nigel, early next year.
- Other gold company’s that are not listed in the gold index include Sub Nigel and Simmer & Jack gold mines.
- Sub Nigel’s shares have moved remarkably since the Aflease announcement, and are up 133% for the year.
Simmer & Jack, the company which bought the liquidated DRD mines, known as Buffelsfontein and Hartebeesfontein, has done even better, moving from 10 cents in January to 98 cents a share at the close of trade on Friday.
Just recently, Roger Kebble, Simmer & Jack’s chairman, announced his retirement, saying that his time was needed to be with his family, following his son’s death. Kebble is under investigation by South Africa’s tax authorities.