Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: regli who wrote (43944)	1/6/2006 12:12:38 AM
From: LLCF	Read Replies (1) of 116555

<However, I would also be concerned about the loss in profitability for a company with such a huge overhang.> Yes, that's why real gold bulls avoid ABX like the plague. OTOH, their hedge program over the last 20 years made ABX the most successful gold company on the planet (OK, almost). Clearly they looked damn smart in any case. As for "HUGE" overhang... you really need to provide more context... you haven't spelled out short positons and when they actually come due vs their production or reserves. <However, they are a producer and therefore will have to explore for or acquire more and more expensive reserves as the price of gold rises.> Again, we need more context... it looks like you're saying that they've sold more gold than they have in the ground... the companies statement says they've only sold 20%! If they havent' sold more than they can produce, then they don't need to buy ANY more reserves, let along 'more expensive' ones as you imply as gold rises. <They must be desperate for a drop in the gold price despite their rhetoric.> Look, I don't know bupkiss about ABX, but you're not making the case... DAK

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