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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (1416)	10/19/1999 9:16:00 AM
From: Enigma	Read Replies (2) \| Respond to of 3558

THC - I think you should leave off posting about Barrick - because you make so many mis-statements that dialogue with you is a waste of time. Your first sentence sets the tone -read it again - it's a lie. Sorry to be so blunt - but you should take a little time to learn about this - others don't even bother responding to this sort of stuff. d

To: ForYourEyesOnly who wrote (1416)	10/19/1999 10:39:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 3558

Let's assume that they have a short position (calls/forward sales) of about 11 million ounces sold at an average price of $350. If the gold price goes to $450, then you have a margin call of roughly $1.1B. Not necessarily. It would depend on the terms and conditions of the "spot deferred" contracts they entered into. Since these are (I think) customized over the counter products made for Barrick by one or more gold banks, there will not necessarily be the requirement of daily mark-to-market variation margin payments like there would be in a regular exchange traded futures contract. I think Ashanti was using exchange traded options, and the near term requirement for cash margin payments nailed them. In fact, my understanding is that one of the chief difference between a "futures contract" and a "forward sale" is that futures have variation margin cash flow, and forward sales agreements do not. Someone please correct me on this if I am wrong. So if Barrick ran its hedge program in an intelligent manner, they would have considered the issue of variation margin payments. A competent program manager would make sure that enough of the hedge commitments would not require variation margin cash flows in the event that gold went up. - Daniel

To: ForYourEyesOnly who wrote (1416)	10/19/1999 12:34:00 PM
From: goldsheet	Read Replies (1) \| Respond to of 3558

> Barrick is well known as having the biggest short position in the world. "short" is when you sell something you don't own in the hopes it will go down in value. Forward sales, along with puts and calls, are perfectly legitimate financial transactions to control future revenue streams of a volatile commodity. Barrick has the gold in reserves and has demonstrated its track record to convert it to production. They can meet forward sales committments. I do the same thing with several stocks I own. I hold shares in a dividend reinvestment plans, which take time to buy/sell, effectively a reserve asset. When the stock get to what I consider a high price I short shares through my broker, which balances out my portfolio, and reduces my risk. If you only look at half of the picture it looks like I am short, but if you look at the whole picture you can really see the entire objective. Barrick is long 51 million ounces of reserves, has hedged 14 million ounces, for an effective long position of 37 million ounces.