I would assume that it was booked ONLY as each hedging transaction was CLOSED. And the profit would have been the difference between the cost of production and the proceeds of the hedge in that final year.
So true. The accounting entries to account for the hedge include the current POG each quarter, thus resulting in the notional profit or loss that is throwing off even professors that should have retired years ago it seems. These notional values are fictitious numbers. The current POG cancels out in the quarter the hedge is delivered to, and the only three numbers left are the booked revenue from the sale of the past Au oz forward sell contract, and the costs to produce that oz Au in the quarter the hedge is delivered to, and the interest Barrick has made by putting the proceeds of the forward sale into a bond for the time interval between the presell and the delivery.
Currently for Barrick on average for the hedged gold this is about $320 - $190 = US$130 profit per oz. One could include total costs per oz, but why, Barrick has no net debt, all the mines capex, even the recent ones were paid for several years ago.
This of course is for the hedged production,...or on average 2 million oz production per year. The unhedged production gets the spot price revenue which means Barricks average profit per oz for total production per year averages closer to $175 per oz for the current POG of US$400.
I learned a long time ago the average professor at university can be just as stupid as the rest of us, as often as the rest of us,...sometimes even more often,...its correlated to how much time they spend in ivory towers (ggggggggggggg)
Well tyke and I get it,...anyone else?
barrick.com |
