His retraction has everything to do with my statement, but it is clear you want to continue to propagate the myth that Barrick's financial statements are being affected by their hedge position. You continue to deal in the myths touted on the nutcase goldbug threads, and by the long essays by self-interested rumor mongers that continue to be proved wrong everyday that Barrick continues to exist without going into bankruptcy. Fact is, you all said Barrick's hedge book would blow up long ago, and it hasn't, and it won't.
So come up with some direct evidence of hedge book destruction, or shove it up your arse like Sprott had to.
The facts on Barrick's hedgebook,...
To ensure our shareholders understand the nature and objectives of the gold hedging program, Barrick is committed to providing clear and transparent disclosure of the program. In particular, shareholders should be aware of the following key terms that are common to our hedging contracts:
Barrick is not subject to any margin calls, regardless of the price of gold, under any agreement.
Barrick can deliver gold up to 10 to 15 years into the future. In the interim, Barrick has the flexibility to sell production at the current spot price or the contract price, whichever is higher.
There are no credit downgrade provisions. A change in Barrick’s credit rating has no effect on Barrick's rights under its hedging contracts.
Barrick does not borrow gold under any of the contracts. Our counterparties, the bullion banks, may borrow gold, in which case they bear any associated risks.
Barrick carefully manages credit exposure to its hedging counterparties. Our counterparties have credit ratings generally "AA" or higher, and any exposure Barrick.
THE LONG-TERM BENEFITS
What are the long-term benefits of Barrick's hedging program?
The benefits of Barrick’s hedging program continue to build. In the first half of 2002 alone, the program generated $97 million in additional revenues - the 57th and 58th consecutive quarters it has earned a premium over the spot gold price. Since inception, the more than $2.2 billion in additional revenue generated by the program has significantly reduced our need to raise capital through debt or stock issuances to finance acquisition, exploration, development and production programs. As a result, we have been able to find and produce more gold, and therefore enhance our exposure to the gold market, without incurring the higher levels of debt and shareholder dilution that would have been otherwise necessary. |
