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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (83917)	3/29/2002 11:11:19 AM
From: Greg Ford	Respond to of 116972

This is what Barrick said in its release in February. At December 31, 2001, the mark-to-market gain on Barrick’s Premium Gold Sales Program was $356 million calculated at a spot price of $279 per ounce, prevailing market interest rates and volatilities. So at $303 we see a change of $24 in the spot price. Take that number and multiply by the total number of ounces they had sold forward (18.2 million). That total is $336 million. That means that the value of hedge book is $356-$336 = $20 million. From this you have to factor in the change in value of the call options that they have sold. At December they had sold about 2.9 million options at $300 and 3 million ounces at $350. They are clearly deeply underwater. Whether the market has figured out that Barrick has no upside on 24 million ounces (forwards plus calls) - while that is another question. But as Barrrick has said they can defer the forwards for 15 years. The problem is that they have to pay to fund the out-of-the money portion. Greg