Frank: I still say that ABX is the BEST run producer, and even better the BEST DARN HEDGER. But with reference to this:
"For the nine month period ended Sept. 30, 1998, the company realized an average $400 (U.S.) per ounce, a premium of $105 (U.S.) per ounce over the average spot price of $295 (U.S.), generating $241-million (U.S.) in additional revenue. Barrick has 10.4 million ounces sold forward, including production through the year 2000, at an average price of $400 (U.S.) per ounce. This allows the company to enhance revenue for its gold production while maintaining full participation in a rising gold market."
I'm not an expert, {Okay I'm not an amateur either} at reading a finacial statement. But isn't 25% of the revenue directly related to the hedging program. And if a majour upterm is expected in gold 1.5 years from now, aren't they at risk of future limits on income since they have forwarded sold 300M-ton for up to 10 years.
And only if gold drifts lower that they will substain growth, and not increase it. Looking at the operating cashflow per share, wouldn't you say that's a little tight? I would say that most of their profits came from currency growth of the USD, and not from new sources.
This appears to me a zero real growth, but currency fluctuation growth. Which suggest to me that more gold producer will need to close down, to remove supply?
So where am I wrong? {I got to get a book on finacial statements} |
