Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: goldsheet who wrote (1433)	10/20/1999 12:39:00 AM
From: ForYourEyesOnly	Read Replies (1) of 3558

What happens when: 1. A BB borrows 1M oz of gold @$300 from a CB for 6 months and loans it to Barrick for 3 years or whatever. 2. The POG goes to $450 just as the 6 month loan expires. 3. The CB wants its gold back and demands payment in physical from the BB. The BB must either: A. Buy physical at market and lose $150M. B. Borrow physical from somewhere else at a much higher interest rate. C. Call the loan to Barrick and request physical. In the case above, the gold in the ground CANNOT be used to pay back the CB. I'm sure you'd like to believe that no one will get hurt in this scenario.......however it's a zero sum game.....some win, some lose...... Cheers,

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