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

To: nickel61 who wrote (1513)	12/7/1999 10:01:00 AM
From: Enigma	Respond to of 3558

1) the same as now or even lower - new projects will in many case come in at under $100/ounce 2)Don't know 3)Yes!

To: nickel61 who wrote (1513)	12/7/1999 10:41:00 AM
From: nickel61	Read Replies (1) \| Respond to of 3558

There are very few deposits in the entire world that have the combination of large easily accessible open pit deposits that have the size and grade necessary to reach a cost of anywhere near $100/ounce. Peirna was one and the large Tanzanian deposit of your friends at PGD might indeed pan out. But these boys have been churning through the Goldstrike Deposit for almost fifteen years and the former mountain is now a very ,very deep hole.Meikel is wonderful and the Carlin trend might allow them to continue to find other great mines with those kind of grades.But we are talking 4 million ounces of annual gold production here. Anyone like yourself that has poked around in the Canadian Juniors knows that that is one hell of a lot of production to replace. To do it at sub $100/ounce is a very aggressive challenge. All of us have been impressed with the tremendous fruitfulness of the Goldstrike property over the years and the tremendous efficency that ABX brought to bear on the extraction of this great deposit,BUT lets get realistic. The LAC acquisition was a complete loser and most of their hundreds of millions spent in joint ventures and various explorations outside Neveda have been of little consequence. The likelyhood of mining rates reversing themselves (They have been rising steadlily for both of our lifetimes ) is not high. A new breakthrough in technology could do it as heap leaching did for awhile in the eighties. But I think you have to put these costs in context of inflation in general. What do you as a gold bug think that will be going forward with the way our dollar based monetary aggregates are currently being inflated? Lease rates are clearly ABX's achilles heel and none of us know where they are going to be over the life of the hedges. We do know however that they are always written on a short term basis (usually 6 months )and that the risk of rolling them over resides with ABX and its shareholders not the Bullion Banks.So this issue is key to the viability of really being able to "spot deffer" the various forward sales as management claims. Yeh, they can defer the delivery if they can afford the cost of borrowing the gold and selling or delivering someone elses gold into the contract rather than their's. If not they must deliver. This should cause you to have a little bit of a second thought on answer #3. Simply spreading the total short sales over the assumed fifteen years is probalby not the approach that gets us closest to the truth.