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GATA Can Blow the Gold Cartel Out of the Water

March 19, 2001

It is becoming apparent that the Gold Cartel is going to have to be blown out of the water.

Fortunately, that can be done easily by just exposing the truth about gold via some transparency operations. That is what the GATA Africa Gold Summit will be all about.

My trip to the Prospectors and Developers Convention in Toronto was much fun and very productive, as I met a good number of sharp people and made new friends.

Of special note was Monday's dinner (March 12) organized by Nick Ferris, president and CEO of Claimstaker Resources (CLN), a junior exploration and mining company with a North American focus.

Also attending were Don Whalen, chairman of High River Gold Mines and chairman of the Canada-Russia Business Forum; Driffield Cameron, vice president for exploration, High River Gold Mines; Lou Wolfin, president of Coral Gold; Ralph Braun, information technology consultant; Brett Whalen, investment banker for Dundee Securities; Dave Shaddrick, president of Rubicon Resources; and Don Neville-Smith, president of DN-S Insurance.

The gold world has been abuzz in recent months about Jipangu Inc. David Mosher is president of High River Gold Mines Ltd. and is Jipangu's North American director. Jipangu Inc., headquartered in Tokyo, is a private gold mining and investment company. Its president is Tamisuke Matsufuji, who to this day is the most successful bond salesman in the history of Salomon Brothers. Matsufuji has become a famous contrarian financial adviser who has authored five best-sellers in Japan. In 1989 he wrote a book predicting the collapse of Japanese stock and real estate markets. Talk about great calls!

Now Matsufuji is predicting a new "golden age" and is preparing accordingly via Jipangu -- a term for "Japan" that was brought to the west by Marco Polo. It means "island of gold" and arose from legends of the Japanese rooftops covered in gold. Jipangu is the only pure gold company in Japan and its goal is to become one of the top 10 gold producers in the world. Jipangu is becoming a vehicle for Japanese investors to participate in the global gold market without currency exposure and is focusing on bringing the gold industry to the Asian investor.

Jipangu is accumulating gold assets around the world and is concentrating on those firms that are gold producers. Its holdings include 23 percent of High River Gold, 26 percent of Claimstaker Resources, 22 percent of Cambior, a significant option to purchase shares in Harmony Gold of South Africa, as well as interests in other junior golds.

Nick Ferris and Don Whelan are enthused about Jipangu's endorsement of their operations, and for good reason.

I had the pleasure of sitting next to Whelan during dinner, and it was most enjoyable. He is a 30-year softball-pitching IBM veteran who came out of semi-retirement to oversee High River Gold (HRG:TSE). High River is a Toronto-based junior gold producer that intends to become a major global gold mining company. It has an international focus with projects in New Britannia, Manitoba, Canada; Buryat Republic, Russia; and Burkina Faso, West Africa. High River owns 26 percent of JSC Buryatzoloto, the Russian company that runs the Zun-Holba and Ironkinda mines and is one of the few mining success stories in Russia. They are the third largest gold producer in that country, as they produced 127,000 ounces at $165 cash cost. There is also a gold reserve of 1.8mm oz of 17g/tonne grade (0.54oz/ton) with an additional resource of 3.6mm oz at grade of 12g/tonne (0.38oz/ton).

Jipangu also owns 16 percent JSC Buryatzoloto outright.

Whelan, who has met Russian Premier Vladimir Putin twice, thought the Russians might be interested in attending the GATA Africa Gold Summit, as their natural resource-rich country also has been hurt by the manipulation of the gold market. So invitations will be sent to the proper Russian officials via the appropriate channels.

At the GATA hospitality suite in Toronto the next evening, I handed a complete kit of GATA's findings to Boris Aryev, chairman of the Mining Working Group of the Canada-Russia Business Forum. It was most ironic to us that we all could envision the headlines after an important Russian official is interviewed by the press following the summit: "Russians Seek Free Gold Market." "Russians Blast U.S. Banks and Government for Communist-like Market Collusion." "Russians Chide U.S. Press for Censoring GATA and Covering Up Gold Story." "Russians Call for Gold Market Transparency and Fair Play."

The GATA hospitality suite on Tuesday night was mobbed, and many impressive gold industry folk stopped by. Geologist Keith Barron and his sidekick, Patrick Anderson, deserve special thanks, as they ran the affair very smoothly for the entire evening. Thanks again, guys.

From Barron, who also did such a marvelous job organizing my stay at the convention, I received this message yesterday: "I caught the tail-end of a presentation by Bob Bishop on the convention floor this morning. He spent the first 15 minutes talking about you and GATA and said, 'You may think these guys are just into conspiracy theories, but I'm telling you they're right and I'm 100 percent behind them.' Patrick caught the whole thing."

And a big thanks to the highly regarded Bishop of the well-followed Gold Mining Stock Report.

On CNBC knocking gold bugs today: They are the same characters who chuckled at Warren Buffet almost exactly one year ago for his having lost his touch for not understanding the new economy and the new reality for stocks. That was the top of the stock market. This ought to be the bottom for gold.

Reg Howe was going to the courthouse in Boston today to pick up the response by the U.S. Treasury Department to his lawsuit.

Word comes that international physical gold demand surged late in the Comex trading session as gold approached $260 per ounce. Somebody is getting it right. From Tuesday's Morning Metal Monitor: "Gold is called $3.30 lower this morning, as lease rates got pummeled down to 4 percent late in the yesterday's New York session as a single large lender entered the market. With the stock market under siege, and a single large lender knocking gold down, the conspiracy theorists will have a field day speculating on the identity of the lender."

No market in history has performed like gold has in recent years. Every single spike is clobbered by the Gold Cartel, yet the gold industry and gold press remain silent. That is why the GATA Africa Gold Summit is needed so badly.

Invitations to the summit go out early next week. Attendance will be limited to those receiving invitations and is not for the public.

The U.S. stock market is one sick puppy. Today's action was terrible and the coming days could be a nightmare for the Wall Street whining crowd. It is pitiful the way they are turning on their hero, Fed Chairman Alan Greenspan, as they beg for an ever-increasing interest rate cut, the further the stock market sinks.

The way things are going, the market will swoon on anything less than a 2 percent Fed fund rate cut on March 20. As I have said for more than a year, there will be a backlash against Wall Street the likes of which this country has never seen when the public realizes that it is not going to get its money back and that it has been had by the greedy touts of Wall Street. It is not going to be a pretty picture.

We all know that they are bashing gold for the reasons they have bashed gold every time there is a crisis. They are covering up the financial condition of the big banks, the economic policies of the Clinton administration, and their ruinous short gold positions for which they have no escape.

The good news for our camp is that they are running out of bullets. The "collapsing" one-month lease rate is still three times higher than normal. Meanwhile, the Aussie dollar closed at 49.2 cents today, which will put further pressure on the overly hedged Aussie gold producers when gold rallies in dollars.

The days of The Gold Cartel are numbered. If a chaotic financial market scene does not get them, the Howe/GATA complaint will. And if not the lawsuit, the GATA Africa Gold Summit will. The "enveloping horn" is doing its thing. You can count on it.

China is the world’s biggest gold producer with more than 355 tons annually. Australia is second.
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