Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG Message Board

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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG

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To: Exsrch who wrote (435)	6/29/1999 2:41:00 PM
From: Zardoz	Read Replies (1) of 48092

I'm not sure gold would have to reach $385 before the price of gold errodes the earnings of ABX. The forward sold positions are a function of lease rates, interests rates, and currencies. Unless we know where the contango's are invested, it's hard to determine the total stability of the hedge. But we can say that it's the premium of the hedge trade that is giving ABX the large profits it's now getting. So would not an increase in price of gold have a negative effect on earnings, while interest rates are rising? Also, if a substantial rise in the price of gold {I mean big} was to occur you'd be better off in a unhedged gold royality such as Franco Nevada, or a semi junior like Kinross. And when the price is near the proposed max, move over to and ABX or PDG as they'll start the hedging at a new level; while you short the juniors. My short term is 1-2 months, long term is a year, for ever is > 1 year. I'm only trading short term. I wouldn't buy any gold company for accumaltion for ever. Gold stocks should be traded regularly. And based on the POG trend. But that said, I prefer PDG at todays level then ABX. PS: Sorry about the spelling, it's lunch time...

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