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Gold/Mining/Energy : Barrick Gold (ABX)
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To: russet who wrote (3204)10/27/2002 6:35:42 PM
From: David Lawrence  Read Replies (1) of 3558
 
>>The gold sold forward is a small fraction of total reserves and annual production, the other 80%+ of annual production gets whatever the current POG is.

The contracts must be pretty spread out if only 20% (about 1.1 million ounces) of annual production is needed to fulfill the obligation. 1.1 million ounces doesn't make much of a dent in covering a 17 million ounce short position. How far forward to do these contracts run? And, how will ABX manage to keep cash costs low enough to ensure they don't get upside down in this exposure?

Thanks in advance from a sector novice trying to understand some of the industry dynamics.
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