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Gold/Mining/Energy : Gold Price Monitor

GDXJ 93.98

+0.6%

Nov 21 4:00 PM EST

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To: Enigma who wrote (38263)	8/4/1999 7:53:00 PM
From: Exsrch	Read Replies (1) of 116764

D, Go to ABX homepage and read their Premium Gold Sales program. They make it abundently clear that the following is done: 1. Gold is sold at spot (for example purposes let assume one ounce) 2. Lets assume that one ounce generated $250 3. Lets assume the contract is for one year (length will vary depending on lease rate, term and prevailing risk on market) 4. $250 invested nets $12.50 in cantango (250*.05=12.50 after cost of running the Premium Gold Sales Program) 5. For accounting purposes $12.50 is added back to the original spot price of $250 resulting in this ounce being sold for $262.50 (the premium being the $12.50 in cantango. Now imagine this happening with $4 billion dollar over the last 10 years and going forward 3 year till 2001. ABX self manages the off balance sheet asset to maximize cantango income and reduce costs. For those who are concerned with $262.50 not being $385 this discrepency exist because it does not take into account the timing differences of contract both in the past or the future. Hope that helps D, Cheers, Exsrch

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