Gold CEOs Told to Fix Slump as Investors Prove Restless- Bloomberg
By Thomas Biesheuvel
Gold-mine investors are losing
patience with management in the $60 billion industry as their
shares head for the first back-to-back annual slump since 1998,
even as the metal completes a dozen years of gains.
Producers from Canada’s Barrick Gold Corp. (ABX), the world’s
biggest, to Newmont Mining Corp. (NEM) of the U.S. are failing to
control expenses. The average cost to extract an ounce of gold
by the largest miners jumped 23 percent to $584.70 in 2011, data
compiled by Bloomberg show. In contrast, silver production costs
fell 12 percent to the lowest since 2007, the data show.
Money managers including billionaire investor George Soros
reacted by boosting stakes in physical gold, pushing gold-mine
executives to resign, or shifting into silver. Direct holdings
of the metal reached a record 2,629.3 metric tons Dec. 10,
valued at $145 billion, after more than tripling in five years,
data compiled by Bloomberg show.
“Investors are very critical, voting with their feet and
pushing management teams to resign,” said John Wong, a
portfolio manager at CQS Group’s New City Investment Managers,
who increased his silver holdings. “You can tell from the way
investors sold Barrick down that they are on short fuses.”
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