SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : Gold Price Monitor
GDXJ 94.04+0.6%Nov 21 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Exsrch who wrote (38361)8/5/1999 8:54:00 AM
From: Enigma  Read Replies (3) of 116764
 
Exsrch - thanks for that - what you are saying I think is that Barrick is running it's own forward sale programme - thus avoiding the external market, the contango being the return it makes on it's internally managed money market fund? The borrowed gold is sold at spot - and the leases are repaid on a continuing basis from actual production?

I'll take your word for it, but it's interesting that this gives a greater return than would be obtained from obtaining the contango immediately from forward sales, and investing the proceeds in the money market fund. Or maybe it's a question of the result of their efforts being the same a) because of the time value of money and b) better because they avoid commission paid to outside brokers?

Another question I have is this - Barrick says from time to time that it has x ounces of gold sold forward at $x/ounce. The results on its internal money market fund will vary according to the interest actually obtained - so this statement must be based on an estimate? If they were using futures contracts (forward sales, whatever) they could give an exact figure - being the sum of all futures contracts.

In summary the use of hedging is to secure the price of the product - to take the price variable out of the question. Barrick appears to have gone a step beyond this.

d
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News