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

To: Enigma who wrote (1575)	12/15/1999 8:36:00 AM
From: nickel61	Read Replies (1) \| Respond to of 3558

Since you are interested in why Barrick is not going up here is some more insights from Le Metropole Cafe:On that note: CREDIT, CREDIT, CREDIT!!!! That is what is on the minds of the big gold producers and gold market participants for next year during a hedging seminar put on by Anglogold and Barrick Gold today in London. I gather from sources that the purpose of the seminar was to inform money mangers how prudent their hedging policies are. Caf‚ members who attended said that is had the look and feel of a sales job - that they might actually have some concerns about their hedged positions. CFO Jamie Sokolsky was Barrick's rep while Calvin Williams represented Anglogold. Also present was bullion dealer Frank Arisman of J. P. Morgan "Hannibal Cannibal" fame. Arisman just happens to be on the Board of Directors of Anglogold. J. P Morgan is one of the bullion dealers that supplies the gold bullion to the producers. Barrick Gold hedges about 14 million ounces (or about 25%) of their future production (plus they have written about 4 million ounces of calls) while Anglogold has hedged about 14 million ounces or 10% of their production. Both firms stated today that their hedging was not implemented as a profit center, but as a risk management tool. From what I hear both companies relayed to guests that credit over gold loans would be a significant market factor next year. The feeling at the seminar was that the "gold carry trade" will go the way of the dinosaur for hedge funds and speculators and that it would not surprise anyone that another Ashanti/Cambior type of event will erupt all over again via another gold producer. This credit issue is a Caf‚ special. Charles Peabody has been all over this - banks are finally cracking down on their loans. Why should gold be any different? Less gold loans means less gold supply hitting the market next year. What are the "Goons" going to do next year to fill a 100 to 150 tonnes a month supply/demand deficit? Barrick and Anglogold are doing this seminar thing in London, Toronto and New York and both are trying to placate stockholders. This is a bit mindboggling. Why don't they both get together and buy back 20 million ounces of gold? What would that do to the price of gold? $50 up $75 higher?. What would that do the share prices of their companies? Would they double in price? Is not that what shareholders want? If I were a Barrick shareholder that is what I would want. Instead, they go around with these inane seminars. Today, with an unchanged gold price, Barrick Gold closed at 17 1/4 down 1/2. Barrick shareholders must be pleased they educated London investors this morning. Well done. Barrick has become an incredible negative PR force and factor for all the gold companies. It has a leadership role and, instead of being the flagship, it has become a rowboat. And their rowboat performance is affecting the share prices of many gold companies - the baby and bath water story. What a shame! What a despicable outrage! Caf‚ member, Arthur Hailey, is having an impact. First, there was David Guyatt's wonderful piece of journalism in this month's London BusinessAge (Dos Passos Table) and then today, I just got word from Business Week they planned to do story on what Arthur Hailey has done and why. Arthur has become a one man Barrick wrecking crew. Good for him. Maybe, other Barrick shareholders will follow suit by selling that stock and Barrick will finally reverse its very aggressive hedging strategy position.