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

To: Bob Howarth who wrote (1461)	11/24/1999 2:22:00 PM
From: nickel61	Read Replies (1) \| Respond to of 3558

The real question that all American Barrick shareholders want to ask themselves is not whether or not Barrick can cover their hedge book,but what price of gold would occur once the market got wind of the fact they were going to try to cover. They are short roughly 18,000,000 ounces or about 500 metric tonnes. Do any of you really think every other producer who is short won't fall all over themselves to get out the closing door first. There are only so many truely great low cost gold deposits in the world and at $300 per ounce gold very few of them are economic. Everyone seems to forget there is a reason why all the other producers are unable to make money at these levels. After all these levels were only obtained by the coordinated selling of many thousands of tonnes of gold that really was produced many years ago and while this sale of the CB's "leased" gold put tremendous downward pressure on the physical spot gold price over the last four years , it is gone and is hanging on some beautiful ladies ear. There is no more capacity to force the spot price lower,period. The only question now is who starts to cover their shorts first and at what price of gold the laggards are forced to capitualte. Think it won't happen? Ask yourselves what you would tell your institutional clients who have suffered through the last four years of ABX declining to $17.90/share from $31.00.share if gold goes to $500/ounce and you underperform. If you think you have a good answer for that one then ask yourselves how many stock bonuses you think ABX management will be rewarded if they end up selling their annual production for 2000 and beyond below the then pervailing spot rather than above. There are after all no free lunches. Good luck!