Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: Dave Lyall who started this subject	9/21/2001 12:21:16 AM
From: Exsrch	of 3558

by: adam_oa Long-Term Sentiment: Strong Buy 09/19/01 11:34 am Msg: 12764 of 12777 Barrick's future potential will always rest on it's ability to increase earnings and do so in an accelerated fashion. How can they do that? or how will that come about? Based line assumptions: 1. Financial demand for gold, flight to safety, is extremely sensitive to coordinated central bank activities and also other market measure to maintain stability. Evidence: almost 1000 point decline in the dow in the last three days with minimal movement in AU and AU stocks. 2. Companies with an explicit strategy to leverage themselves to the price of gold, those who wait for financial demand, are unlikely to make gains in earning if gold price is managed. No spike in AU no spike in earnings no spike in stock price 3. Companies with an explicit strategy to leverage themselves to the price of gold, as a category,have the worst balance sheet. Additionally those who do not have the competence of ABX who dabble in hedging have equally bad balance sheets. Both types of companies operate in working capital deficit and financing, cost and cash flow management life or death In this enviornment ABX is strongly positioned to make consistent earnings increases with its disiplined hedging. Additionally those companies with deteriorating balance sheets become strong take over candidates for ABX. In the long run ABX, with almost a billion in cash, will become the consolidator of the AU market giving it the most probable chance of increasing it earnings in an accelerated fashion. The current situation should have made all the non hedged companies spike that has not occured and it seems in the short term not a likely event. Adam Posted as a reply to: Msg 12736 by canuk07

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