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Ashanti Goldfields Co. (ASL) Message Board

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  • nikit2h nikit2h May 18, 1998 9:53 PM Flag

    Strongest Gold Stock on the Board

    May be ASL home base - Ghana - now looks prety
    good,
    when NEM got into trouble in Pacific Rim? Now
    investors reavaluating ASL based on reserves, production
    and cost/oz to the level of ABX and NEM. It should be
    $13-14, I belive, if NEM and ABX at the current level.

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    • I do not believe you can value this stock on the
      level as ABX, NEM or other major NA producer. There is
      political risk in Africa which the market takes into
      account along with other risks. But the action today is
      unusual at best. I consider the rise suspicious in light
      of the tone of today's market - but the volume
      discounts this. Thus I am led to believe something else may
      be going on SA stocks often trade on insider
      information. I do not believe ASL is subject to a takeover by
      another major firm as it would be too difficult in light
      of the ownership of Lonro and the Government of
      Ghana. In addition it is a proudly black institution.
      But Lonro has been considered to be a target with its
      holding of ASL. And perhaps a Major intends to acquire
      Lonro's mining interests in a manner that would be
      bullish for ASL. Just a thought. I have observed the
      stock closely over a considerable period of time in
      view of my significant holdings. But I have not
      observed anything close to today's action in light of a
      downtrend in gold and the gold stocks in general. Perhaps
      it is just an anomoly. Perhaps an institution was
      purchasing and if through, the stock may be off sharply in
      the morning. That is the difficulty of attempting to
      day trade stocks or time market turns. Stocks
      frequently move very swiftly at times when one least expects
      them to and often in a counter direction to what one
      would think. And that is why IMO one should at the
      fundamentals of a company and general conditions of the market
      - and then look at the technicals.

      • 1 Reply to Aucile
      • I too have followed ASl closely and it important
        to remember that the stock is 'thin' most all of the
        time. The float is spread across four continents. If an
        institution or individual wants to buy say 100K shares the
        choices are bid it up hard or spend a week buying small
        lumps. Last week somebody bought 20K and 30K chunks, it
        cost him/her some money to do. Try selling some next
        time it goes down. It ain't pretty. Was this person
        smart is the question.
        The Gov't of Ghana and
        Lonhro own over 50% of the total stock so a takeover is
        unlikely I think, which is a pity since it is vastly
        underpriced, in Africa or not.