Sam: Barrick Gold News:
TA
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Barrick Gold Corp.
Dow Jones Newswires -- September 29, 1999
DJ Barrick Gold CEO: Cloud Over Gold Market Is Lifting
NEW YORK (Dow Jones)--Conditions in the gold market appear to be improving, said Randall
Oliphant, chief executive officer at Barrick Gold Corp. (ABX).
On Tuesday, the day he spoke to CNBC, the price of gold pushed past $300 an ounce.
"There has been a big cloud that hung over gold for some time," Oliphant said.
But he attributed the lifting of this cloud to statements made by European central banks, and to the
actions of the International Monetary Fund.
On Sunday, 15 central European banks announced they were capping the amount of gold they would
sell over the next five years in order to stabilize the gold market. The IMF confirmed it planned to
revalue 14 million ounces of gold from its current valuation of about $47 an ounce to the market price,
and canceled its earlier plan to sell up to 10 million ounces in the open market.
"There is plenty of room for gold sales," said Oliphant, "and demand looks very good."
-By Beth M. Mantz, Dow Jones Newswires; Dow Jones Newswires; 201-938-5393
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Barrick Gold Corp.
Dow Jones Newswires -- September 29, 1999
DJ Peru's Gold Miners Eyeing New Projects As Prices Rise
By Virginia Rey-Sanchez
LIMA (Dow Jones)--Recent gold price strength, if sustained, could speed exploration in Peru and the
starting of some previously unprofitable projects, company officials and mining analysts said
Wednesday.
"The rise in the price will bring us to re-evaluate our positions," Carlos Galvez, deputy finance manager
at Compania de Minas Buenaventura (BVN), told Dow Jones Newswires.
"If the gold price stabilizes at $300 to $310 an ounce, unprofitable projects may become profitable," he
added.
Buenaventura runs various gold and silver projects in Peru, and has a 43.65% stake in Minera
Yanacocha SA, a mine that produced a record output of 150,000 ounces of gold in August. Newmont
Mining Corp (NEM) holds a 51.35% share in the gold mine, Latin America's largest, and the
International Finance Corp has a 5.0% share.
The price of gold has shot up over $300 an ounce in the last few days, mainly on central bank
statements, although on Wednesday it weakened slightly.
Peru is among the top 10 gold producers in the world. From January to August this year, Peruvian
mines produced 84,456 kilograms of gold, a 44.2% rise over the same period last year.
"Peru's mining companies may revaluate projects depending on the level of the price increase and if the
trend is sustained," said one analyst with Peruvian brokerage Credibolsa.
Minas Conga Project Seen Benefiting
Buenaventura's Minas Conga copper and gold project in the Cajamarca region would be one that could
benefit from rising prices.
"The $250 price an ounce made Conga a difficult project to be developed but with the rise the
perspective is different," Galvez said.
The company could take advantage of rising prices to hedge production at Conga by selling gold
forward, he noted.
Minas Conga has 10 million ounces of resources, he said.
Conga requires a larger investment in the exploration and development stage than Yanacocha as
processing the ore will require a different process, he said.
Galvez added that a sustainable rise in price could also allow Buenaventura to accelerate other smaller,
higher ore grade projects.
One would be its Orcopampa project, which a preliminary estimate says has 700,000 tons of resources
with 0.8 ounce of gold per ton, he noted.
He also mentioned Antapite, which has 120,000 tons of mineral reserves with a content of 0.8 to 1.0
ounce of gold per ton.
Buenaventura's share price rose sharply on the Lima Stock Exchange earlier this week before falling
Wednesday. Analysts say the share price has a 66% correlation with the price of gold.
Barrick Could Also Profit
Much of the recent increase in Peru's gold mining output has come from the opening of Barrick Gold
Corp's (ABX) Pierina mine, the lowest cost major gold mine in the world.
With that mine in Peru up and running, Barrick doesn't plan any changes there, but better gold prices
are a further incentive for it to look for even more, officials said.
"The rise helps further explorations," Vince Borg, vice-president of communications, said in a telephone
interview.
The Pierina mine is expected to produce more than 800,000 ounces of gold at a total cash cost of less
than $50 an ounce in 1999, the company's web site says. However, officials have said that it could
produce more than 835,000 ounces of gold this year from the mine.
Other mining projects are also progressing in Peru.
For example, on Tuesday, another Canadian miner, Manhattan Minerals Corp (T.MAN), said an equity
offering of 5.5 million common shares had been oversubscribed.
The offer brought in C$27.5 million, some of which is earmarked for its Tambo Grande project in Peru.
That $250 million to $300 million project holds gold as well as base metals. -By Virginia
Rey-Sanchez:Dow Jones Newswires: 511-221-7050: vrs@amauta.rcp.net.pe
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Barrick Gold Corp.
Dow Jones Newswires -- September 30, 1999
DJ CANADA TIP SHEET: It's A Golden Time For TD Asset
Mgr
By Ben Dummett
TORONTO (Dow Jones)--Bonnie Bloomberg, manager of TD Asset Management's C$388 million
Green Line Value Fund, isn't one to let a golden opportunity pass her by.
Bloomberg had virtually ignored gold stocks for close to three years, but this past summer she
overweighted the sector in the Value Fund - a move that has paid off handsomely this year.
Indeed, the Toronto Stock Exchange gold sector soared about 20% Monday, after 15 European central
banks promised Sunday to sharply reduce the amount of gold they would sell over the next five years.
That announcement sent the gold price up US$14 to a five-month high of US$280 an ounce, and the
metal is trading Thursday at about US$299 an ounce.
Just as impressive, Toronto's gold sector has gained about 15% so far this year, handily outperforming
the broader TSE 300 composite index's 6.0% gain over the same period.
The move to an overweight position in gold stocks earlier this year underscores the valuation investing
methodology that Bloomberg and her partner, John Pepperell, use to manage the Value Fund.
Bloomberg uses price-to-earnings, price-to-book, price-to-cash-flow and dividend-yield valuations to
find undervalued investments. That means the average p/e ratio, price-to-book and price-to-cash-flow
multiples of the fund's holdings will tend to be lower than the corresponding valuations for the broader
market. At the same time, the average dividend yield of the fund's stocks will tend to exceed that of the
overall market, Bloomberg said.
Qualitatively, Bloomberg looks for companies with a good franchise and strong management.
Gold Stock Valuations Too Compelling To Pass Up
In the case of gold stocks, the Value Fund typically underweights this sector, but Bloomberg took the
unusual step of overweighting the group this past summer because of its compelling valuations.
For instance, Barrick Gold Corp. (ABX), one of the fund's biggest gold stock holdings, was trading
around 10 times projected cash flow when Bloomberg bought the issue, compared with historical levels
in the mid-to-high teens, the fund manager said.
In addition, "we went overweight the sector when we felt sentiment was very, very low and we didn't
think a US$250 (an ounce) gold price was sustainable," Bloomberg said.
The fund's other big gold holding is Franco-Nevada Mining Corp. (T.FN), which has impressive
operating margins and one of the "smartest management teams around." Bloomberg said.
Still, the Value Fund lagged the broader market in the first eight months of the year, gaining about 1.5%
versus a 8.5% gain in the TSE 300 composite index.
Bloomberg attributed the lagging performance so far this year to the holding's relative lack of high-flying
technology issues.
"This fund has not owned a lot of technology names, because of the large valuations attributed to them,"
Bloomberg said. These lofty valuations preclude Bloomberg from investing in these stocks because of
the fund's mandate to hold issues with relatively low valuations, Bloomberg said.
At times when technology stocks or other types of high growth stocks are outperforming the greater
market, it becomes more difficult to be a value investor. However, "I think over time, stocks will trade
closer to their intrinsic value and, in those periods of time, everyone wishes they were a value investor,"
Bloomberg reasoned.
Indeed, the Value Fund's performance over the long term is much more impressive than the fund's
performance for this year. As of Aug. 31, 1999, the fund had a one-year return of 15.98%, a three-year
return of 8.05% and a five-year return of 11.42%.
-Ben Dummett, Dow Jones Newswires; 416-306-2024;
ben.dummett@dowjones.com
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Message #41667 from Sam at Sep 30 1999 11:15AM
Can you realy beleive all the things you read
Two weeks ago I read how Barrick had almost all their forward selling of gold covered and were not planning on forwarding anymore for now
Today we read a post that says the opposite about Barrick
Any comments
sam |
