M. Carter,
I must agree with Mongo Slade's comments Re: ABX:
exchange2000.com
Barrick is a fine company. About a year ago, I had a very substantial position in Trizec-Hahn (then Horsham,) a holding company that is ABX's parent, in a way. I have not been following ABX of late, but I do not think they have changed their basic approach to the mining business in the last year.
As I recall, ABX was *completely* hedged against adverse movements in the price of gold for the next *several years.* Using forward contracts, ABX locked in a number of years of anticipated output, at a price of $400 - $425 per ounce (the numbers are from memory, but I'm pretty sure that is the range.) Additionally, ABX is a low cost producer, with costs of $225 - $250 per ounce (again, from memory.)
Therefore, be very careful. If I had to pick the gold mining company *least* effected by the reduction in metal prices, it would be ABX. As a matter of fact, I wouldn't be surprized if ABX turns this situation to its advantage by aquiring (dirt-cheap, of course) one or two unhedged producers, marginal at $350/ounce gold, that are now about to be faced with great dificulties. It is just my opinion, but I would probably rather be long ABX than short.
Have a wonderful Thanksgiving, everyone.
RB |
