Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: russet who wrote (3011)	5/22/2002 5:53:55 AM
From: nickel61	of 3558

Well here we seem to be getting back to a little saner discussion from all parties. The main thing that I am trying to do is get fuller disclosre from the hedgers on what the nature of their hedging is, and then to have the shareholders when they understand exactly what is really behind these miraculous claims of a higher price for their gold(namely that this is simply a projection of future interest earnings on a gold short sale) the shareholders force management to reverse the hedges. Why would they want to do that? So they, the shareholders can make more money in a rising gold market. That is why. It is after all their company. What if gold doesn't rise? Well since every gold mining company except Barrick is already feeling the heat to close their hedges and doing so. It is highly likly that the pressure of reversing all those derivatives is going to be significant and that should add significant fuel to the upward move in the gold price. The Barrick shareholders are going to have some very tough questions for the Board of Directors of Barrick if when the second quarter of 2002 ends the loss to the off balance sheet hedge book is $500 million dollars US further underwater. It is already half way there as we speak. You have been around management long enough to know that the pressure will be intense on Barrick to stop that level of exposure, there will not be any niceties about whether or not it is "real" it will just be closed. Because while the Barrick shareholders were clearly not fully aware of the real nature of the spot defferred game on the way down in a bear market for gold, you can be sure they will not like any bullshit answers about why they are not getting more of the upside in a bull market for gold, especially if the reversal of the very hedges that Barrick is so proud of is the reason for the ignition of the bull market from such low gold prices that no one is making any money mining gold.

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