From the May 2001 issue
of DRD Investor Brief

By Mark Wellesley-Wood, Chairman
Durban Roodeport Deep

I have just returned from the GATA African Gold Summit, and
what a refreshing session it was. Their speakers cast a light
on some of the murkier corners of the gold market, and what
is appearing is an end to this long bear market.

Irrespective of any conspiracy theory to depress the price
of gold, the fundamentals are slowly turning round. At long
last people are realizing that the crucial upside for gold is
as sound money. I firmly believe that gold is money, and
jewelry is a byproduct.

Now that Central Banks have ditched their gold, they will
have to convince their citizens that their array of committees
-- FOMCs, MPCs, etc. -- can make a mess of monetary
policy in the long run. This recession may be their first real
test. Gold always used to be the central banker's friend and
the politician's enemy. Now that central banks have made
gold their enemy, they are presenting every individual with
a wonderful opportunity to own gold for his own asset mix.

Having lent out so much gold, the central banks also now
run the risk of not getting it all back. On certain assumptions,
the bank vaults could be empty in just seven years. The
markets could therefore spring back to bite them still.

As for producers like DRD, one of the most marginal gold
miners in the world, it re-affirms to me that your board has
taken the right decision to adopt its policy of eliminating its
hedge. Unfortunately, we can reduce only as we can afford
it. Nevertheless, we closed out a 75,000-ounce hedge on
our Tolukuma gold mine in Papua New Guinea just last
week. With costs down to $160/oz, it seemed increasingly
inappropriate to hedge.

Bullion bankers, many of whom are our counterparties, are
increasingly in what GATA's Frank Veneroso termed an
"inadvertent corner." They will be under increasing pressure
to unwind their positions. Let's just hope that they do not
create too much havoc in the industry in the process.

So, well-done, GATA!

DRD has already assisted GATA and I assure you that we
will continue to support their good work.

P.S. If anyone thinks that the use of gold as a payment
mechanism is dead, then I recommend they visit the
www.goldmoney.com Internet site to see a secure Internet
payment system based on gold.

-END-



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