Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: Enigma who wrote (2232)	3/31/2002 2:57:08 PM
From: nickel61	of 3558

Marginal analysis is of course very valuable for some types of business decisions but not when you are determining that gold is somehow "overpriced" If there is a short fall of supply over the current demand and the market price is below the all in cost of running a gold mining company to produce, even the most effiecent mines in the world, then that is a very interesting situation. One that makes you begin to wonder how that came about. One of the factor that have brought the market price of gold so low is that the world's central banks have sold off large amounts of their gold reserves for the expressed purpose of raising US dollar currency that can earn a higher interest rate. This would be one of the reasons why gold has been below the true all in cost of constructing a company to mine it. That is of course what one has to do to mine gold. You do need the overhead and the administration. You can slice accounting numbers a million different ways for various types of business decisions but on the bottom line you are only in business to make a profit and that requires the total costs be looked at for any venture.

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