Offered: future vue- 2003- C.Allmon re: 2 of XAU components NEM/ABX:
posted excerpt under Fair Use Doctrine for Educational & Discussion Purposes only!
Top Dog: Barrick or Newmont
Charles Allmon: "Barrick Gold (NYSE ABX $14.60) aims to double its profit by 2006 with a new plan that centers on a $2 billion mine development program.
Barrick's long-term plan calls for an average 2 million ounces of additional annual gold production for the next 10 years at expected cash costs of $125 per ounce. That would reflect 29% lower costs than its current production base. Barrick Gold announced a new growth plan designed to make the company the world's largest and most profitable gold producer, and the industry's major growth stock.
We expect this to be one of the largest development programs ever undertaken by a gold producer," said Randall Oliphant, president and chief executive officer. "The unique position we are in today is the culmination of our focus on acquiring quality mines and exploration and development properties during a period of weak gold prices and developing them as gold prices strengthen, using our development expertise."
We are further reducing our hedge position for three main reasons: 1) interest rates are at 40-year lows, leading to lower forward premiums; 2) Barrick has never been stronger financially; and 3) the outlook for gold prices is positive," said Jamie Sokalsky, senior vice president and chief financial officer.
Apparently Barrick now hopes to top Newmont Mining as the world's largest gold mining firm. For many years, Barrick ranked first in gold hedging operations, selling productions forward. This severely limits profit potential in event the price of gold rises sharply. Now, Barrick is cutting back sharply on hedging and stepping up gold production. It will be interesting to see which company, Barrick or Newmont, forges ahead as top dog."
Newmont Mining (NYSE NEM $24.15) On August 7, management had this comment: "We have the largest market capitalization, highest gold production and reserves, and greatest market liquidity in the gold industry."
"We expect to meet our raised target of $400 million in non-core asset sales in 2002 through sales of equity interests in Lihir Gold Limited, Aber Diamond Corporation and more recently, the pending sale of TVX Newmont
Americas and the pending exchange of our 45 percent equity stake in Echo Bay Mining Ltd. for approximately 14
percent of the proposed new Kinross Gold Corporation."
Newmont also announced that they were cleaning up their hedged positions acquired with the purchase of
Normandy Mining in Australia. By mid-2003, Newmont should offer a pure gold play with no hedging, which sharply reduces profits."
GROWTH STOCK OUTLOOK
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Personal Commentary
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It's been over 21 months since any posts to this thread of mine.
What I have found when I profitably played the XAU ABXs options by being a call / put WRITER,
volatility in the top 1 or 2 XAU names was a steady source of personal, speculative income
I'm not a broker, nor am I advising anyone to take this tack. I am just posting an experiential observation.
I am NOT a subscriber to nor endorser of the CAllmon publication.
I Just posted this Excerpt under Fair Use Doctrine for Educational & Discussion Purposes only.
I'm not even sure when this was written, altho' it would appear from extrapolation it was prior to
August 02 |
