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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (297)	6/6/2000 2:28:00 PM
From: goldsheet	Respond to of 4051

> First buying calls isn't a free transaction. How much did they pay for a 2001 call, 335 strike price: $15?, $25?. True, like insurance it is neither free nor risk free. They paid $67 million for the 6.8 million calls (3.1 in 2000, 3.7 in 2001), just under $10. > Maybe I'm brain dead, but selling a forward contract gold at $360, then turning around and buying an equal amount of calls @ 335 (plus say $20) strikes me as an odd strategy I guess they could have bought 360 calls to offset the 360 forward, if they wanted to match positions, but I don't there there would have been a big premium difference. There is an advantage of the calls being in the money at 335, if gold rises. They pick up an extra $15 per ounce as gold moves from 335 to 360. > I don't want a bank, I want a mining company. I'll wager that per se many, if not most gold investors have that same fear of financial institutions sentiment. That's a reason we buy gold in the first place. I definitely understand your point. I just see the hedging as a firm attempting to achieve the highest possible price for its product, while trying to get a little downside protection. The reason I buy gold stocks is because they are volatile speculations. I do not hold them as long term investments and have been more than happy to take the money and run on all these bear market rallies. Sure, I will be wrong someday, but meanwhile I'm having fun and making money - the real reason for investing in anything !

To: russwinter who wrote (297)	6/6/2000 2:51:00 PM
From: Enigma	Read Replies (2) \| Respond to of 4051

You're taking 16% of production that's hedged and somehow projecting it into a 100% position - instead of giving the company kudos for prudence. Also I think the call positions were bought some time after the hedge positions were put in place - in response in large part to the questionaire sent to institutional investors. I believe the calls were bought towards the end of last year. And what may be happening in the market place with this stock is that investors are becoming aware that the company's outlook based on total return is excellent - and higher cash flow per share will force the stock up. And one can cull up all sorts of dark thoughts about the other side of these transactions - forgetting that the Barrick team is there to do its extra due diligence. They call the shots - not the dealers as some would have us believe. When the dealers meet with Barrick they are not pulling the wool over the eyes of a bunch of country cousins - hell Barrick has been in on the design of this business from the beginning and selects the other parties pretty carefully. Time to move on?