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

To: nickel61 who wrote (1925)	1/12/2000 5:05:00 PM
From: Exsrch	Respond to of 3558

Nickel61, I haven't been following this thread recently. However, it seems you have a pretty good point that ABX's cost are no different than any large producer (adding capex, explr, etc). Your note says that ABX realized $400 per ounce on the revenue side. If I subtract your estimate of the cost, $305, from $400 (1999 realized gold price)than ABX is making $95 per ounce sold. Is that right? I thought ABX was a shitty colluding, manipulating unprofitable company? I don't understand? Can you help? I did some back of the envelop calc and the follow confuses me even more: - ABX is debt free (for all intent and purposes) - If I scale (mathematically) the percentage of capex to peer companies (as percentage of reserves, revenue, ounces produced etc) ABX is spending in some cases 500% more while showing robust earning growth. While peer companies are doing poorly (operationally not by stock price) - Effectively ABX functions and meets all its obligations from internal cash flow (free cash flow). - Why are they operationally so good? - How do they make $95 an ounce when everyone else is losing money? - If ABX's stock price is lagging does this mean that ABX is the best buy? Your help is much appreciated. Exsrch

To: nickel61 who wrote (1925)	1/12/2000 6:22:00 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 3558

<< Take reported profit and divide it by number of shares and then subtract this profit ($95 US)from the average realized gold price for 1999 of $400/ounce thus you will see that the gold they produce actually costs them $305/ounce. >> I think this is not exactly right my friend. If you want to include capital costs into the picture to calculate real net profits, you should then take net cash flows instead of net profits. No? This will lower the real cost which should not include amortization and depletion.