Well Nuckel,...the gold price moves up, and so does Barrick today. None of the fund managers or analysts following Barrick understands what you are talking about. They all understand the simplicity and conservative nature of Barrick's forward selling. Barrick are not speculating in short selling,.. they are merely preselling a small portion of their gold in the ground to lock in an economic revenue and make interest on the proceeds. They have no counterparty risk in doing this, and will not go bankrupt.
Barrick has made these statements in public many times, and neither the bond rating agencies, their auditors, nor their bank counterparties have contradicted any of their statements to that effect. Only a handful of dumb-arsed ANALysts, and a few simpletons like you challenge what Barrick says, with no proof.
You know very well that Barrick's forward selling would have made them a premium over the spot gold price for 97% of the last 180+ years, even though gold went up nearly 20 times its starting value in 1833, over a very short period of time in that 180+ years. You also know that during the few years that gold spiked, Barrick would be selling only a fraction of their gold at the locked in lower price. It is also clear from the present that they would have worked down their hedge position as the price of gold increased, much as they are doing right now to increase their leverage to the rising gold price. The vast majority of their gold production each year would be sold at whatever spot was, resulting in an average gold revenue per oz slightly less than that of an unhedged producer. As soon as the price of gold peaked in the two spikes of the 1970's they would be forward selling again at the high spot price, and collecting enormous interest rate contango with low lease rates and high bond interest rates in future years. As I recall, long term bonds coming off the 1980 spike in gold were 18%,...tie that to a 2% gold lease rate and you make tonnes of interest income, and they would blow away the unhedged crowd.
Work it out for yourself moron,...a 8% interest rate contango compounded over 10 years doubles the effective spot price you presold the gold at 12 years ago,...simple math Nuckel,...get it???, 8% for ten years compounded annually is a double, and if you compound monthly with monthly bond premiums,...why don't you work it out Mr. Financial Nuckelhead. In late 1980 with a gold price of $600 and a contango of 18%-2% = 16%. Compound that contango over ten years and instead of receiving $600 for that oz, your interest income has almost quadrupled that revenue for an oz of gold sitting in the ground to $2280 per oz. Simple math even morons should be able to understand.
It is quite obvious that producers that don't hedge are speculating that the price of gold will rise,...that's speculation, not mine management. As rising gold prices have only happened a few times in the last 180 years, who is the prudent manager of a diversified mix of gold mines, the price taker, or the one that hedges a bit to lock in a good price for a small portion of their annual production, and a small portion of the reserves.
I suspect you know this, but are too small in character to admit you were wrong. That is the mark of the true moron.
The only thing going bankrupt around here is your thought processes.
Prove your claims with math, analysis and statements from verifiable sources, or admit your are just a moron. |
