Gold Price Monitor Message Board

STOCKTALK

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 98.59

-2.8%

Nov 13 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: d:oug who wrote (42652)	10/11/1999 9:06:00 AM
From: Bill Jackson	Read Replies (1) of 116759

Doug, Barrick has gold in the ground, lots of it. So they made commitments to gold users to buy it from Barrick on a scheduled basis as it was mined. So Barrick would have contracts out in advance for many years. I am not sure how far forward a market exists. A jewellery maker wants assured gold and does not want to get screwed if it goes to $800/oz again, but he can tolerate, say $350-450 or so as long as he has it planned in. He adds value so $400 worth of gold = $2000 worth of jewellery. Barrick can mine gold to stockpile gold or to sell gold. They are a low cost producer. They can also buy cheap spot gold and fill their forward sales from the spot market and stockpile their mined gold. A plan like this would allow them to overhedge to quite a degree as they would have their stockpile uf $150 gold they mined to meet those furure calls. So Barrick has a well managed and capable program. Cambior and Ashanti thought gold was going to be down for many years and saw a chance to make a few bucks with enormous overhedging programs, far in excess of what they could mine from their own mines. As these come home to roost they may well drive them both to destruction/takeover. Recent jumps in gold have strained their treasuries as shown by their recent share price drops. There is more to come on this as more companies get caught in this easy money trap. Just wait till the middle of November. Bill

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next