Nothing quite like having a Gold Miner or two as defensive plays in your portfolio when Inflation starts to rear its ugly head in the Macro Economies of the World.

If your a Gold Bull and I have been for a few years now you probably believe POG is about to hit new highs and break out. Sometime later this year I feel we will really see it take off and Im hoping to position myself for that and also consolidation within the industry with the large Miners buying up the small producing developers like Mercator which trades on the Aim market.

Interesting to read the chaimans recent report on the developments going on in the company...

INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2006
CHAIRMAN'S REPORT

I am pleased to present your Company's Interim Report for the six months to 31
December 2006. Mercator continues to advance towards its target of producing
gold bymid-2007 and having at least four years of mineable reserves in place.
The Companyhas already defined a mining reserve of 75,000 ounces of gold at
Surprise and anindicated resource of 380,000 ounces of gold at
Prohibition-Vivian-Consols. Furtherdrilling is being conducted at Prohibition to
extend the existing resources andstudies are currently underway to defining a
probable reserve to allow for a decisionwith regard to the second stage
production planned for early 2008. The recentfund-raising of 4.49 million
provides the capital required to achieve the aboveobjectives.

Refurbishment of the Yaloginda Plant is nearing completion with re-commissioning
expected to commence during May. All of the plant components starting with the
crushing circuit, milling circuit, leaching and finishing with the gold elution
circuit will have been fully tested before full scale production is achieved.
Lowgrade ore from existing stockpiles and from the pre strip material for the
Surpriseopen pit will provide the initial re-commissioning ore source. Full
scale productionwould follow the build up of gold inventory in the Carbon in
Leach circuit.Updated Resource estimates for Prohibition-Vivian-Consols are
under review togetherwith various mining scenarios that will lead to Probable
Reserve announcements in thecoming weeks.

Plans are being developed to optimise the use of Mercator's extensive tenement
holdings at Meekatharra, which presently cover 1,932km2 with contained gold
resourcesof 2,160,000 ounces. The Board believes there is considerable potential
to utilisethese ground holdings in the current positive gold-mining environment.
The Board ispresently considering a number of alternatives in this regard.
Your Company's professional team continues to deliver positive results on all
frontsand I am confident they will continue to deliver at similarly high
standards in thefuture.

To compliment the existing team, three new production orientated appointments
havebeen made: a highly skilled and experienced Mining Engineer to the position
ofOperations Manager, the appointment of an equally experienced Metallurgist as
ProcessManager, and appointment of a Mine Planning engineer. At a time when
skilledprofessionals are highly sought after in Western Australia, Mercator has
been mostfortunate to attract the calibre of these professionals who are also
locating to siterather than electing a fly in fly out roster.

I look forward to reporting to you on your company's progress on a regular basis
throughout this exciting phase in our development.

Terrence Strapp
CHAIRMAN

AND to complement this we had a RNS report out earlier today re to new contract....

MERCATOR GOLD PLC
('Mercator Gold' or the 'Company')

MINING CONTRACT AWARDED


Mercator Gold Australia Pty Ltd is pleased to announce a 'Heads of Agreement'
has been reached with Mining & Civil Australia Pty Ltd ('MACA') to carry out the
initial Open Pit mining of the Surprise ore reserve.

The contractor will commence mobilisation of plant and equipment on 24 April
2007.

MACA is an emerging Western Australia owned and operated company which has
quickly established an excellent reputation in the Mining Contracting industry.

MACA currently employs approximately 230 people and has completed projects for
Lion Ore, Harmony Gold and Croesus Mining. Its current projects include Fortnum
(Gleneagle), Jack Hills (Murchison Metals), Wiluna (Agincourt Resources),
Kirkalocka (Equigold) and North Dordie (Mincor Resources).

Managing Director, Patrick Harford, commented:

'The appointment of Mining & Civil as earth moving contractor at Meekatharra
brings us an important step closer to production. We move now from the planning
stage to the implementation of our strategy for profitable and sustainable
production.'


Mercator Gold plc.

WEB SITE...

www.mercatorgold.com

TA....



MARKET CAP....

46 million

DYOR.

Brokers Hoodless B are tipping this stock this month.....

http://www.hoodlessbrennan.com/products-services/share-tips/?utm_source=5tips&utm_medium=email&utm_campaign=014

12 page BUY recommendation note from Eddison aswell...

http://www.mercatorgold.com/admin/Research/Docs/070418%20mercatorgold%20outlook.pdf

like y/self ive been watching these myself in addition to a few gold plays . l agree that a lot of fiscal data coming from usa is at best soft and at worst very perilous . And it is being currently overlooked but that wont last . A day of reckoning will come . ll have also been examining food manufacturers ( not retailers except WHOLE foods of USA ) as another defensive play ...@+ J

Yep Ive been looking at a few food producers TFC.

Im not as sceptical on the World markets as it appears your goodself is, but it doesnt do any harm to have a few defensives in the old portfolio.

Plus I think a lot of these small gold producers are going to be gobbled up by the big boys over the next year or so.

Pretty good day for this one.

In the blue again this morning.

goldfinger,

I agree, nice rise the last few days, as buyers come in after the broker presentations.

You in then Andy?.

Gold to Post Fresh Highs in 2007 and 2008?

By Jackie Steinitz
04 Apr 2007 at 06:43 PM GMT-04:00


LONDON (ResourceInvestor.com) -- The mood at the London launch of the GFMS Gold Survey 2007 report was bullish about the short and medium prospects for gold. Chairman Philip Klapwijk noted in his presentation that:



The annual average gold price this year is looking very likely to break the previous record set in 1980 of $614.50.
There is a good chance that the market in 2007 will exceed the 2006 high of $725.
The upward trend is likely to continue into 2008.
The principal driving factors behind the strength of the market were seen as sustained investment demand, lower official sector sales and ongoing dehedging by producers.




The Gold Survey is based on extensive research by GFMS, an independent precious metals research consultancy. In the course of preparing this years report the GFMS team have visited more than 300 companies/institutions in 39 countries and updated a database on 785 mines and projects. The report provides detailed estimates for the ten years to 2006 on the fundamentals of the gold market including supply, demand, stocks, investment, bullion trade and prices. It also looks at the outlook for 2007 and beyond.

Here are some of the highlights.

Mine Supply

Mine production fell 3% (79 tonnes) last year to a 10-year low of 2,471 tonnes, primarily as a result of the underinvestment in the sector during the 1990s.

Nonetheless there were significant production gains from some markets notably China (+8%) and Latin America (+7%), where new mines such as Veladero in Argentina (Barrick [NYSE:ABX; TSX:ABX]), Ampari in Brazil (Goldcorp [NYSE:GG; TSX:G]), Mulatos in Mexico (Alamos Gold [TSX:AGI]) and Choco 10 in Venezuela (Gold Fields [NYSE:GFI]) generated over 20 tonnes of new gold.

These gains, however, were not sufficient to offset falls from the traditional mining provinces of South Africa, the U.S., Canada and Australia. There were significant declines also from the worlds two largest mines; Yanacocha in Peru (Newmont [NYSE:NEM] and Buenaventura [NYSE:BVN]), and Grasberg in Indonesia (Freeport McRoRans [NYSE:FCX]).

Cost pressures continued to rise sharply around the world reflecting the rising costs of labour, energy, mining consumables and equipment. Average cash costs per ounce in 2006 were $317/ounce, up 17% or $45/ounce on 2005, more than double the price hike measured in the previous year. Total costs, including depreciation, rose 18% to $401/oz.

It was not all doom and gloom for the producers however as the gold price rose by $160/ounce (from $444/oz in 2005 to $604/oz in 2006) allowing for very healthy increases in producer margins; the average increase globally was 66%.

Supply from Above Ground Stocks

Mine production accounted for some 63% of total supply to the market last year. The remainder was sourced from stocks above the ground; from both official sector sales, which fell dramatically, and from the recycling of scrap which reached a new record.

GFMS estimate that net official sector sales fell 51%, down from 674 tonnes in 2005 to 328 tonnes in 2006, the lowest level since 1997. This was primarily because of significantly lower gross sales from the signatories of the Central Bank Gold Agreement (CBGA), who, for the first time in their 7 year history, sold under their annual maximum quota - by 100 tonnes. Interestingly the countries outside the agreement became modest net purchasers of gold probably as some countries have diversified away from dollars. Klapwijk suggested that the decline in CBGA sales and the increasing number of gross purchases elsewhere are indicative of a change in attitude towards gold as a reserve asset in the central banking community.

The level of scrap supplied to the market surged 25% to a record 1,100 tonnes. Virtually all the increase occurred in the first half of 2006 when prices rose rapidly. This precipitated a shake-out of tired jewellery trade stocks, some of which had been held in stock for several years. Scrap increased from all countries except India, though the majority of the gains occurred in countries which are traditionally price sensitive, particularly the Middle East (though the big increase in Saudi Arabia may also have been connected with the stock market slump at the time).
In total GFMS estimated that supply to the market in 2006 fell by 5% (or 205 tonnes) to just over 3,900 tonnes. Above ground stocks at the end of 2006 totalled 158,000 tonnes, equivalent to over 40 years production at current levels.

Demand

There were big changes - some up, some down - in each of the components of demand in 2006.

Jewellery offtake in 2006 fell to 2,280 tonnes, a fall of 16% or 428 tonnes. The problem stemmed not from income or GDP growth both of which were robust, but from the high gold price and price volatility, as evidenced by the fact that the fall was all concentrated in the first half of the year. Jewellery now just accounts for 68% of total gold demand, a level which was typical in the early 1980s but which is way down from the 75%-80% seen in the early years of this decade. Offtake is now 30% below the peak in 2000 in volume terms. However it should be noted that although volumes are down consumers are spending more on gold in jewellery in value than they did last year. Klapwijk commented that he was sanguine about the underlying health of the gold jewellery business and saw the recent declines merely as a reaction to price.
By contrast demand for other fabrication rose 11% principally because of growth in the use of gold in electronics (helped by strong consumer demand for these products) and higher coin minting (particularly the U.S. Buffalo coin).

Producer dehedging provided significant support for the gold price in 2006 generating a net 373 tonnes of demand (based on gross dehedging of 438 tonnes but 65 tonnes of new hedging). This was a four-fold increase on 2005 and, according to GFMS, it suggests that producers are reaffirming their belief that the rally in the gold price still has some way to go. Total outstanding sales, loans and the delta hedge against options are now down to 1,364 tonnes, a level last seem in 1994. Klapwijk commented that it seems clear that producers no longer have any desire to add to their positions unless they have to in order to meet financing requirements.
Investment

GFMS estimate of investment comprises three components; bar hoarding (which fell 14%), official coin fabrication (up 16%) and the catch-all residual between supply and demand which GFMS refer to as implied net investment, which cannot be independently measured but which in theory should reflect the net impact of all investor activity which is not already measured.

Key points from their estimates are:

Total investment worldwide in gold fell 13% by weight in 2006 to 743 tonnes. However in value it rose by 18% to about $14.4 billion.

Although at first sight the decline in volume might suggest that investor interest weakened last year there is strong evidence that investment interest in gold actually rose markedly in 2006. However there was a shift from primarily buy-side interest in 2005 to a healthier buy- and sell-side last year. The bulk of the selling was profit taking or stop loss selling in the wake of the May price spike.

Although implied net investment fell 19% to 388 tonnes last year there were increases in some components. In particular ETFs made a big contribution, with holdings by the nine products measured by GFMS increasing by 260 tonnes during the year. OTC activity was also strong. Fund involvement in Comex and CBOT futures declined during 2006, but is rising again in 2007.
Gold investment continued to be dominated by institutions and high net worth individuals. There is little retail activity.
Outlook

On the supply side GFMS are anticipating that supply in 2007 will fall again, though at a lower rate than the 5% fall seen in 2006. At best it will be flat. Specifically:

Mine production will rise this year by perhaps 1-2%. GFMS commented that new mines, ramp-ups and less of a swing at some of the worlds larger operations that dampened the impact of new production in 2006 should support forecast production level to above 2,500 tonnes.

Official sector sales are likely to remain at lower levels than previous years with CBGA countries likely to undershoot their quota again while the rest of the world will remain small net purchasers.

Scrap is likely to be significantly less as much of the loose jewellery has already been mobilised. It will need higher prices, perhaps above $700/oz to flush out further significant increases in scrap.
The demand picture is more complex. Even though non-jewellery fabrication is likely to rise fabrication demand will probably fall in total, weighed down by further price-induced declines in jewellery manufacture. Nonetheless GFMS anticipate that the fall in jewellery demand will be less than in 2006 with demand stronger on the price dips as the price floor appears to have moved up from $580/oz to comfortably above $600 - perhaps even $620-640/oz.

Meanwhile producer dehedging will be maintained at elevated levels. According to Klapwijk Were probably going to see a slightly lower level of support from de-hedging in 2007 but thats almost entirely due to exceptional corporate restructurings in early 2006. Theres no sign yet of producers losing their nerve over the price and starting to put in place significant strategic hedges.

Investment demand will remain the key however; a major theme of the presentation was the potential for gold to post fresh highs with the upside firmly in hand of investors.

Klapwijk identified a number of possible factors which will support the gold price over the next 18 months or so:

There is a growing investor appetite for safe haven assets due to worsening economic and political uncertainty. Arguably the outlook for the dollar remains poor, the U.S. economy remains highly leveraged to an increasingly problematic housing market and the outlook for traditional investment routes is questionable.
In contrast commodity prices could remain strong. It is possible to envisage a situation where the U.S. economy and the dollar are weakening but there is still strong offtake from developing countries such as China and India. This could prove the perfect storm for the gold price.

There is a threat of higher inflation.

Geopolitical tensions are mounting, especially as regards U.S. and Iran.

Investment in gold is still relatively low. One measure of institutional investment suggests that the combined non-commercial position in 13 commodities was still only $138 billion at the end of 2006 - a figure which is less than the market capitalisation of some blue-chip equities. There is considerable scope for the weight of money in gold to increase.

The level of net official sector sales will remain low. According to Klapwijk, We lost around 350 tonnes of supply from official selling last year and not only did that impact the market directly but the implied shift in the central bankers stance on gold was good for investor confidence.
Jewellery demand will provide a floor to the price with buying increasing on price dips.
Scrap supply will be less responsive to price and is unlikely to reach the levels of last year as much has already been mobilised.
Klapwijk also agreed during the Q&A session that the 2008 Olympics may have some effect on Chinese demand.

In summary Klapwijk argued that the price is likely to be supported by sustained investment demand, low official sector sales and continued producer dehedging and a further jump in investment demand could be triggered by geopolitical and global economic events which would drive growth in the second half of 2007. A new high in 2008 not improbable.

Longer term, however, he argued that prices are likely to retreat back towards the metals long term cost of production as the economic and political situations change and sentiment towards the dollar and other assets recovers.

In the meantime the environment is highly positive for the gold price.



Source: World Gold Council

Goldfinger,

Thanks for this thread - I bought in this morning.

Steve

Welcome aboard Steve looks like you brought us good luck.

Climbing nicely.

Been a good week for this one.

More to come, a lot more.

Yes. Me to . Bought in late 70's while witnessing it fly on minimal volume with a fair ratio of buyers and sellers .Luckily - Considering fridays 5% rise.. lt seems very resilient to downturns in the commodoties market. The manipulation of gold by bullion banks and lnstitutions cannot surely last what with a soaring mining sector, a distressed dollar and other negative geopolitical factors ,, l believe left to market forces gold should be $2700 p/to .Furthermore after talking to some most serious " goldheads " they believe that the USA's reserves are grossly exxagerated ......Trading patterns over the past few days illustate MMs are mooching for stock ..Candlesticks in 3 white soldiers is as bullish as one is likely to see; yet the extended gap between the latter two suggests MCR could be a tad overbought . BUT following such a massive decline it meets the criteria of having been oversold in the past. And is in search of new support levels ...lncidentally G/F based on your research what value do you deem as fair ? .lndeed takeover looks very possible .....Have a peek at AXM now they are not sitting on a spike Vlad would have been proud off,,,,,,,,,,,,,,,,,,,, B/ chance ....a'bientot ..@+

G/F et al Have u seen Putins mining minister recent remarks reg POG and a number of other miners operating in Russia. . Methinks Putin certainly wants to re-nationalise the oil sector ; but also has a keen eye on commodoties like gold for when Russia, who like both China and lndia , has massive dollar holdings , decides to SELL ! a'bientot ,,,Faires attention ,,,,,,,,,,,@+ J

I have read a few pieces of news on this and keeping a watchfull eye out TFC.

Price fallen back a little although at first glances looks like more buys than sells.

Good to se it back in the blue.

Hi GF

Must be because I bought a few this am. LOL

(Also went back into MMG and CSB today and started CCT)

Cheers, Madison

Hi, Maders,

yep weve had a good day here.

Plenty more to come mind.

Im adding.

Opening at 79.// Their existed quite substantial selling pressure at the 81.5 /82 p . Yet MCR rode it and once over it posively took off.....lts been at this level before on a lot of froth ,,,,,but this time they have the goodies ...l believe ill get these at the 80p level as profits are crystalized ,,,,But after that theres a lot of blue sky ....@+ J..............No-one who is sane is "shorting",opening an option calling this down and likewise in futures mkt....niceeeee .....a'bientot ..