Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: FuzzFace who wrote (2635)	5/12/2002 11:07:27 AM
From: Rarebird	of 3558

<I don't think HM shareholders made out so well.> I bought HM back in the days when I was stupid and ignorant about the Gold Market(back in late 98 initially and I averaged down quite a few times) and did not know how to evaluate a gold mining company. Today, I'm up a little over 27% in 3 1/2 years, which is quite poor in comparison to my tremendous gains in other gold mining stocks in a much shorter period of time. But I didn't lose on account of my stupidity and ignorance. I certainly deserved to. But life is not fair. I paid for my stupidity and ignorance by suffering deeply; but I lucked out when ABX bought HM. I said at the time of the HM/ABX merger and I'll say it again: That merger was the greatest thing that ever happened to HM shareholders: Message 16041348 Message 16105134 Listen, ABX's hedging program has generated over $2 billion in additional revenue for the company and put them in the strongest financial position in an industry rapidly consolidating. ABX's view is that companies need to generate earnings and cash flow and returns in excess of their cost of capital. Hedging allows ABX to reduce risk and improve earnings, cash flow and return on equity. ABX's treasury group is not a profit center, bonuses are not based on exceeding the spot price of gold. There responsibility is to minimize risk. Last year, Barrick was the only senior gold company to increase reserves and ABX has a number of development projects in the pipeline which could increase production substantially at lower cost than its existing production. These projects require capital and ABX prefers the certainty that it can sell about half of the next five years production at an average price of at least $340 per ounce. ABX has no margin calls at any price and can roll its hedging contracts forward for up to 15 years at its sole discretion and sell all of its gold, if prices rose above $340 per ounce. In the event that that occurred the contracts ABX rolls forward would rise in value as the funds are simply on deposit with the major Wall Street and European banks earning interest. You just don't get it FuzzFace. ABX is the greatest gold mining company in the World. You really need to read ABX's financials and 10Q's. Moreover, as a proud shareholder of ABX, ABX responds to all my Emails and questions quite promptly, which HM investor relations never did. I'm the luckiest guy in the World that ABX bought out HM. There is not a day that goes by that I don't bless ABX.

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