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Gold/Mining/Energy : Barrick Gold (ABX)
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To: Enigma who wrote (3328)1/20/2003 2:09:06 PM
From: Ken Benes   of 3558
 
Maybe they have focused too much attention to their hedging practices and not enough to the mining end. It appears there is more to barrick's stagnation than meets the eye and that intangible may very well be linked to their hedgebook and the companies relation to the bullion banks.

It was not so long ago, that Enron, Worldcom, and others were offering up similar platitudes for their lack of performance. When the dust cleared, it was evident that the reason for the demise were more complex than the problem indicated as originally stated.

Markets are diverse and vibrant. The negative sentiment that is expressed on this board is not the reason why abx is lagging, the main concern involves company management and its disregard for those who invest money in its shares.

I was absolutely amazed at the slide show production at the Barrick website trying to explain the resilience of its hedging program. Having read what appears more as a sale pitch than a factual account, I came away with the impression that if its financial structure was performing according to its design, why is this company not earning more. In fact why have its earnings declined during a period of dramatic price increases in the price of gold. While tangibles such as mining costs and grades have an impact, a reasonable expectation would indicate a smaller increase in profits, not a decline. Maybe Joe Izuzu could package the sell job a bit better for them.

Ken
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