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Gold/Mining/Energy : Barrick Gold (ABX)
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To: nickel61 who wrote (2033)2/7/2000 6:33:00 PM
From: russwinter  Read Replies (2) of 3558
 
Yesterday I ripped ABX in my analysis of their 9/30/99 hedge program. I'm still reserving some judgement until I see the new program in the same clear spread sheet format as before, but this looks like a major positive change to me.

First in terms of ABX, we are seeing a very clear signal from them that they are bullish on POG. I thought the 4.0 million naked calls they had in 9/30/99 was nuts. Now they've closed out 1.3 million. More significant is the
purchase of the at the money and out of money long calls. Brilliant! That takes them out of harms way as far as
I'm concerned. Obviously they must have been caught off guard by the quick rally last fall and to their credit
have adapted.

As far as POG and the effect of hedging, this is a step in the right direction. From what I've gleaned so far, the
hedge book will be reduced in aggregate by 1.7 million over the next year. They haven't denounced hedging as
aggressively as PDG did, but still a positive fundamental development for gold when a major producer not only
stops "double dip" selling, but delivers a considerable amount of gold without corresponding new sales.

In my opinion, the sell off in POG late today is probably the last ditch gasp of some desperate bullion bank, or
maybe the Dutch or some other obscure CB to spook the market again. If so, it will fail. Smart players should look at this as a gift to get on board. I look for a steady rally, and am pleased with this new development.
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