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Gold/Mining/Energy : Gold Price Monitor
GDXJ 118.97-0.9%Dec 24 4:00 PM EST
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To: Rarebird who wrote (54465)6/16/2000 8:55:00 AM
From: Enigma  Read Replies (2) of 116823
 
I will of course second your remarks on Barrick! It almost seems expected of me on this thread - but usually as a riposte to some anti- Barrick posting. I passed on yesterday's beauty which described ABX as a hedge fund with a few holes in the ground! Ah well, what can one say?

The hedging started as a project financing vehicle and then spread to an ongoing policy. Control of production among the producers was impossible because of competition - I think it has been pointed out here by Bob Johnson that the 'majors' account for less than 40% of world production. And there's always the fear of sanctions by governments in the event of a runaway POG.

However this FN/GOLD merger will have wide ramifications - and companies may unwind their hedge books to some extent. It will make people look at other takeover targets eg ASL which was mentioned by Chris Thompson yesterday among others.

Still, FN and GOLD are both majors - so nothing changes in total - except that the XAU will need another holding.

IMO, and this seems obvious, the name of the game will still be to find more gold and produce more, at less cost. Some marginal mines may be closed through rationalisation. In a theoretical world it might be otherwise. Nota Benes!
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