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Trading Symbol  TSE:CCM

Shareholder Update
Comments on the Gold Market

Vancouver, British Columbia, Canada,
November 5, 1999

Some shareholders recently expressed to me their disappointment that gold has retraced most of its gains made in September. In fact, such a retracement was predictable, both technically and fundamentally, as I mentioned in my Shareholder Update on October 4th (posted on our website,

Technically, gold now needs to consolidate its 50% - 62.5% retracement before it can move forward with support. That means it should trade between $290 and $300, until the next breakout.

Fundamentally, though gold appears to have completed its 19-year bear market, and the recent ECB announcement should mark the commencement of at least a 5-year bull market. Since there will be at least an annual 500 tonne gap (12%) between bullion demand and supply (including ECB supply) for 5 years, and global gold production looks relatively flat for the next 3 years, the gold price must therefore rise over time due to demand pressures alone.

However, there was a World Bank announcement in late September that seems to suggest that any rise in the gold price will be slow but steady. To paraphrase the bank, We will cooperate with the ECB and other central banks to do whatever is necessary to maintain an orderly market.

It is no surprise then that in the past two weeks, both the Kuwait and South African central banks have LENT their gold into the leasing pool. Not only do they benefit from the recently higher gold lease rates, the gold was snapped up by bullion bankers and/or gold producers eager to cover small amounts of their large short positions in gold.

Our outlook on gold in the short term is for a slow, orderly rise in the bullion price. In the longer term, however, there could well be a short squeeze on physical bullion that has the potential to cause a run in the price of gold.


Bradford J. Cooke
President and CEO

For further information contact:
Robert Carriere
Investor Relations
Tel: (604) 685-9700

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