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Gold/Mining/Energy : Barrick Gold (ABX)
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To: re3 who wrote (1541)12/11/1999 5:51:00 PM
From: nickel61  Read Replies (1) of 3558
 
I didn't really mean to address it to you. Sorry if I missdirected it. I don't really have any knowledge of
Anglogold. I've been to ABX's Goldstrike and Miekle properties several times over the years and they are great properties and the management is good. My arguement (and it is a deeply felt one, as you can probably tell) is I believe that the amount of the hedges that they and others have put in place are not only a threat to their shareholders best interests but have actually significantly contributed to the disaster that has befallen all gold producers over the last four years. Their strategy might well have been to break the back of their competitors and then scoop up their assets for peanuts. There has clearly been a market manipulation in the gold market and this has destroyed alot of the net worth of many gold shareholders and gold stock managers such as myself, whether or not this culpability extends directly to ABX as many of the professionals in the industry claim- I frankly don't know.
But I do believe all these over hedged producers will have to cover in the next several months. And it is exposure like this that will cause the enlightened shareholders to demand action. It is after all their company and under the current situation the company has effectively capped their upside and kept the value for themselves.
Anglogold is a very large company and I have never met their management nor visited their properties so I have no opinion except they are pulling a very large short position as well.An entirely different situation though being very deep and politically troubled mines with huge variable costs it is much more dificult to make a decision about their objectives with the hedges than it is in ABX'x case.

Best of luck to you and hope you and your family enjoy the holidays.
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