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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: GVC who wrote (8091)	10/7/1999 6:54:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 81088

Interesting take on Barrick.. I do admit that the vagaries of the hedging strategies for gold miners are complex and elude me at times. Just how do they defer an agreement to sell their gold at a fixed price for such a period of time, maintaining their option to sell at spot? Why would any counterparty be interested in taking on such an agreement? It would seem they would agree to buy Barricks gold at a pre-set price in order to guarantee a measure of stability in the raw material costs. If that agreement becomes null and void, or deferred, at Barrick's option, I would see little benefit to entering into such an hedging strategy with Barrick. Where would the buyer of that obligation benefit in having such an agreement? Regards, Ron

To: GVC who wrote (8091)	10/7/1999 7:09:00 PM
From: Jim McMannis	Respond to of 81088

RE:""...But now with gold soaring, the prospect that spot prices will rise above Barrick's hedge price is increasing. Currently, Barrick says it has sold forward about 13.3 million ounces of gold at an average price of about $385 per ounce through 2001. However, if the spot price does rise above $385, Mr. Sokalsky said Barrick has the luxury of deferring its forward contracts for as long as 15 years and instead selling its gold production at the spot price. That means the company can wait for spot prices to return to lower levels before returning its borrowed gold to the central banks' That ought to really help once the dust settles.... What about PDG? Jim