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Gold/Mining/Energy : Gold Price Monitor

GDXJ 93.98

+0.6%

Nov 21 4:00 PM EST

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To: Enigma who wrote (33726)	5/12/1999 3:56:00 PM
From: John Hunt	Read Replies (3) of 116764

Barrick's Forward Gold Sales FWIW, here are the facts from the Barrick site..... The Past Ten Years * Consistently exceeded spot gold prices * Realized price on average yielded a $56 premium over spot price * $1.1 billion in additional revenue The Present * 11.5 million ounces sold * 3 years production at $385 per ounce - minimum price locked in * Mark to market gain - $750 million (value today if we closed-out contracts) The Future * Our 11.5 million ounces sold creates a $4 billion asset (which generates $200 million per year in interest income) * Actively manage the asset to maximize interest income Barrick will continue to earn a superior return than others because: * We add to the program consistently. * We have longer and more flexible contract terms. * We actively manage the $4 billion asset to maximize interest income. (Barrick's annual revenues are 1.2 billion including the $200 million that they say they make on the forward sales) ***** It seems to me the emphasis is more on profiting from a falling gold price and earning interest than on obtaining the best price for the metal ... However, I guess it does depend on your perspective.

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