Small Talk: Going for gold in a financial crisis

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The Independent Online

It can be assumed, perhaps guaranteed, that even in the worst of times someone is making money out of a crisis. In recent months, this truism has been applied to the small number of hedge fund managers and investors who have called the markets correctly and are raking it in while others are in a state of economic misery.

Sadly, the financial meltdown pales into insignificance when compared to the suffering endured by the ordinary people of Zimbabwe, who might not be seeing the bottom falling out of their stock portfolios or pension pots, but who are having to deal with hunger, cholera and a complete collapse in their living standards.

Nonetheless, there is still money to be made in what was Africa's breadbasket, and shares in Mwana Africa, the Alternative Investment Market (AIM)-listed miner, soared by 36 per cent on Wednesday last week when it announced an intention to tap into the high price of gold by restarting its operations just outside Harare.

Those in favour of liberal markets will no doubt welcome the Mugabe regime's recent decision to allow gold miners to sell gold at the market price, in US dollars, rather than exchange it for worthless Zimbabwean dollars at an even more worthless fixed price. According to analysts, it will take Mwana between four and six months, and US$6m (£4.2m), to get everything up and running. The mine produced 98,000 ounces in 2002, and with gold trading up at around $1,000 an ounce, you can immediately see the benefit to Mwana and its shareholders. The benefit to the Zimbabwean people may be less apparent.

xG Technology AIMs to buck the market

One reason why mobile phone bills are so high is that operators need to own a spectrum licence to send data across high-frequency radio waves. And spectrum licences do not come cheap.

The US AIM-listed technology group xG Technology reckons it can halve the average bill by offering operators a different technology that allows data to be sent over low-frequency radio waves.

The problem for investors is that the market has treated xG just like the rest of AIM and the stock is off nearly 80 per cent.

The company is hoping that next week's full-year numbers, expected to show record revenues, will change all that.

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