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

To: nickel61 who wrote (1585)	12/17/1999 8:43:00 AM
From: Enigma	Read Replies (1) \| Respond to of 3558

One simple question - which others may want to expand on - doesn't every company which sells forward borrow the gold? A forward sale doesn't come out of thin air - it has to be covered by gold and, since the actual physical gold is in the ground the equivalent gold has to be borrowed. Is this too simple? Am I missing something? A second question - and I don't know if we'll ever find out the answer - what is Arthur Hailey's real motive here? Is there a score, a personal score to settle? Are we to believe that he is only motivated by altruism?

To: nickel61 who wrote (1585)	12/17/1999 1:11:00 PM
From: Investor-ex!	Read Replies (1) \| Respond to of 3558

Hi nickel61, There's nothing new here. The lease exposure situation has already been discussed on this thread more than a few times. Barrick's management is well aware of this exposure, yet believes it can be dealt with as events unfold. For the umpteenth time, the majority of Barrick's reserves are NOT hedged. A rise in gold's pricing in US dollar terms will increase the value of their uncommitted reserves immensely. What Mr. Howe says is correct as far as it goes, save for the assumption he makes that Barrick "must repay" its forwards at predicted great cost. Nothing could be further from the truth. Barrick in no way has to buy back its forwards in the open market. In fact, the opposite is true, as they can defer covering their sales for as many as 15 years, if they find it advantageous to do so. Barrick's covering will come either from production or offsetting transactions in the paper markets. There's no reason I can see that they couldn't neutralize the bulk of their exposure, if they thought they had to, in the futures market. They certainly have the financial wherewithal to do so. Give it up. A major producer with their bases adequately covered is just not the whipping boy you folks are after to make whatever case it is you're trying to make. At worst, Barrick is a merely trying to intelligently make the best of the political and economic realities of a rotted, manipulated gold market. Your time would be much better spent demanding accountability of the LBMA, Goldman-Sachs, The Bank of England, and/or the Federal Reserve.