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

To: Enigma who wrote (2258)	3/31/2002 4:34:26 PM
From: nickel61	Respond to of 3558

You are a good man Enigma. You remember what I say and for that I salute you. Happy Easter..

To: Enigma who wrote (2258)	3/31/2002 8:42:30 PM
From: russet	Read Replies (2) \| Respond to of 3558

Some interesting facts about Barrick that are current, and not filled with all the BS from the anti-gold hedger community. Source is financial statements, NR's and an interview with Oliphant,... Half of Barrick's production this year will be hedged as opposed to 100% of last years production. 18 million oz of Barricks gold reserves are hedged right now, leaving 80% of the 82.3 million oz of reserves unhedged. That's reserves, not resources. Accounting for resources could double the oz numbers. Barrick has no net debt on their balance sheet. So the amortization of mine costs could be considered irrelevant. Therefore one could consider the cash costs to be the relevant number to use in assessing future profitability, adding a small amount for reclamation and interest payments (interest payments are no longer being capitalized going forward either, so should show up in cash costs unless new mines are developed) for Barrick. Barricks average overall cash costs (end of 2001) are US$171 per oz (including reclamation). Considering they have no net debt, therefore mine cost amortization is simply an accounting entry (the mines are already paid for), cash cost is the relevant number we should use to determine Barricks profitability in the future. Barrick cannot be hurt by a spike up in gold prices. They will not lose money as they are not margined. They will gain greatly along with the other gold companies by constructing additional mines, proving up additional reserves on existing properties, hedging less production, and delivering portions of production to their hedges if warranted by a large and sustained spike in gold. If gold prices stay the same or go down, Barrick will exceed other producers comparative numbers through low cash costs and higher revenue per ounce, thanks to the hedges. Perhaps the big question is not why Barrick hedged the way they did for the last decade,...but why the other producers were so stupid that they didn't. Barrick made billions of extra dollars and funded may new very profitable mines through intelligent hedging. Perhaps the others by slogging Barrick, are simply attempting to divert attention away from their incompetence and lack of foresite. http://www.barrick.com/2_Press_Releases/ Revenue for 2001 reached $1,989 million on gold sales of 6,278,000 ounces, compared with $1,936 million on gold sales of 5,794,000 ounces in 2000. The higher revenues result from an 8 percent increase in gold sales, partially offset by a $17 per ounce or 5 percent decline in the realized price. For the year, Barrick realized a $70 per ounce premium over the average spot price of $271 on the 61 percent of production delivered into the Company’s Premium Gold Sales Program, compared with a realized price of $360 in 2000 and a premium of $84 on the 63 percent of production delivered into the Program. The balance of the ounces sold -- principally Homestake’s production -- were sold at an average price of $277 per ounce in 2001. Overall, the Company realized $317 per ounce, $46 higher than the average spot price for the year, generating an additional $289 million in revenue. The number of spot deferred contracts in the Company’s Premium Gold Sales Program totaled 18.2 million ounces at December 31. This represents approximately 22 percent of reserves, deliverable over the next 15 years at an average minimum price of $345 per ounce, with a minimum floor price of $365 per ounce on 50 percent of planned production in 2002. The balance of 2002 production is expected to be sold at spot gold prices. OPERATIONS OVERVIEW For the year 2001, the Company reported total operating costs, including reclamation, of $1,080 million, compared with $950 million for the year prior. On a per-ounce basis, total cash costs for the year were $162, compared to $155 per ounce for 2000. With the continued weakness in gold prices, all of the Company’s mines have focused on reducing costs under their control across all areas of their operation, including unit mining, processing and administrative costs per ton. At the same time, higher power costs and lower grades at Goldstrike and lower recovery rates during start-up at Bulyanhulu have resulted in the higher cash costs per ounce compared to the prior year period. Barrick’s Other Properties include seven mines in various stages of closure. Two of the mines were closed in 2001 (Homestake and Mount Charlotte), with five scheduled to close in 2002 (El Indio, Bousquet, McLaughlin, Ruby Hill and Agua de la Falda).