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Gold/Mining/Energy : Barrick Gold (ABX)
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To: Tommaso who wrote (2346)4/4/2002 9:43:26 AM
From: nickel61  Read Replies (1) of 3558
 
You answered your own question better than I can.Those risks that you mentioned are exactly the risks that a hedger like Barrick faces.

It is not a minor bit of hedging we are talking about here, 18 million ounces is compared to 3.7-4 million ounces of annual production. Your comments are right on target. The other unknown is the cost of the needed imputs. Which one of us really knows what the future price of oil, labor of regulation will be over the next fifteen years. Or is even (dumb)arogant enough to think they do? Past is not prologue and paper currencies can change value very significantly in less than fifteen years, as of course will the labor, energy , and regulatory costs just that are denominated in them.

The real bottom line question is Barrick management as prescient as Robert Rubin, who retired from the bubble market he created in the summer of 1998, or the Enron executives who in the summer of 2001 still thought they were in control of all the variables?

Which one graduated first in their class at Harvard and Yale Law School? You may not respect the man but you have to admit he created quite a stock market phenomeum for at least awhile. I think he has moved on knowing dam well what the outcome of his actions will be. DO the Barrick executives really have a clue? I doubt it?
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