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

To: Investor-ex! who wrote (1491)	12/3/1999 9:21:00 AM
From: nickel61	Read Replies (1) \| Respond to of 3558

Well one thing is clear from the Ashanti article from the FT and the earlier posting of the Cambior press release that even the managements of these companies did not understand the ramifications of their hedges even several days after they had begun to blow up on them. If that is so how do you continue to believe that no matter what price spot gold goes to American Barrick WILL BE ABLE TO HAVE IT BOTH WAYS.HAVE YOU SEEM A LOT OF EXAMPLES OF A FREE LUNCH IN YOUR LIFE?Yet that is exactly what you are believing when you straight line their hedge exposure over the fifteen years maximum that you evidently got as the maximum extension on some of their hedges and assuming that they have the luxury of extending all their hedges over the full amount of time.Not likely and very simplistic.The matter you mentioned about the lease rates really goes to the heart of the issue. Future rates that CB or others will agree to lend their gold is dependent on many factors but the most basic one is if the lenders begin to become aware that their has been more gold sold short than can be repaid-IN OTHER WORDS THEY BEGIN TO REALIZE THAT THEY WILL NOT GET THEIR GOLD BACK-what rate of interest do you think they will charge then.And what is the mathmatical significance of a shift from 1% lease rates to 6%+ on a fifteen year extension of a loan? Can't happen take a look at the Platinum lease rates right now and for the last year.The best part though is: What exactly did you expect Barrick management to tell you about their risk exposure?