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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Winzer who wrote (37065)	7/12/1999 11:58:00 PM
From: Braincramp	Read Replies (1) \| Respond to of 116790

Who would buy $US400 gold They may sell forward at $256, who can tell the bottom of gold at this time. ABX has a cash cost of $130, at $256 they are still in the black. With the cash they have at this point, they would like to see gold decrease some more so they can buy up a few company's at fire sale prices.

To: Winzer who wrote (37065)	7/13/1999 12:29:00 AM
From: Exsrch	Read Replies (1) \| Respond to of 116790

No one buys it at US$400. ABX sells the borrowed CB gold at spot and than creates an off balance sheet asset which they invest in US treasuries earning 7.5% gross and netting 5%. You take the price CB gold sold per ounce at spot than add the incremental interest earned (called cantango) by the time the gold is returned to CB. This at minium (could be more if they earn higher cantango) is US$385 for the next 12.5 million ounces to be sold by ABX (next three years of production). See barrick homepage at barrick.com under Premium Gold Sales program for additional or official explanations. The premium gold sales program is a way for ABX to earn cantango or interest on gold they have yet to mine. If ABX really wanted to kill the price of gold (which is in no ones interest especially ABX) they could borrow more than three years of production. Cheers, Exsrch - Off balance sheet assets currently US$4 billion - Currently earning US$200 million per year in Cantango - With a reserve of 50 million ounces ABX, in theory, could sell 12 years worth of gold production. Not practical; however, they could easily double their forward position to 25 million ounces (with some additional risks). - If they could buy NEM they could, in theory, sell forward an additional ~8 million ounces per year (over 300 tons of gold per year). Cheers, Exsrch