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

To: Frank Pembleton who wrote (1355)	6/11/2001 2:25:18 PM
From: goldsheet	Read Replies (1) \| Respond to of 4051

> I guess perception is everything.<g> Correct. Homestake has a perception of having very little hedges. They have about 2moz, about 10% of reserves. 1.5moz is hedged in $AUS at about $US265, under current spot. Meanwhile, folks are mad at Barrick for being hedged at $340+ Placer Dome made a nice speech and news release over a year ago about how they were going to reduce hedging. They now have a perception of being a "reluctant hedger" although they are just about as hedged as Barrick, relative to reserves and production.

To: Frank Pembleton who wrote (1355)	6/11/2001 2:30:48 PM
From: russwinter	Read Replies (1) \| Respond to of 4051

Actually your instincts on ABX were right on. But, the truth is you actually underestimated the extent of their hedging. I presume you are using 25% as a percentage of reserves and resources. Production (and profitable) should be the basis to evaluate how deep a hole these hedgers have dug themselves into. And ABX, after adjusting for the 2001 long calls is hedged 17.7 million ounces. Depending on when, or if you think projects like Pascua get going, that's over five years of production and brings us to about the time Pierna starts to decline. By my math they are over 500% hedged. One could point out that they have good hedged prices, but that's a bit like saying wealthy people use higher grade cocaine than poor people. <finally thru my hands up> As well you should! These companies don't deserve your investment.