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

To: tyc:> who wrote (2280)	4/1/2002 3:25:12 PM
From: nickel61	Respond to of 3558

When you spend money to buy something that is supposed to produce product and you then have to admit that it is not going to be economic, do you pretend that you never spent the money? You spent it, you wrote off shareholder equity to reflect that you don't have it anymore and then that is what common sense would call a cost of being in the gold mining business, as much as the depreciation and depletion allowances are for mines that are producing. You win some you lose some but you still spent the money. It is a cost in most basic of senses. The finding and paying for new mines whether they work out or not is clearly a cost of doing business. The accountants are excluding them from the ongoing asssesment of the profitablity of the remaining companies after they write off the cost. All I am saying is that the total profitablity of the business has to reflect all the costs. If you want to exclude some of it when you are talking about the remainding operational mines fine. But when you are talking about the costs of production of gold the only meaningful number is the total cost of production including all of the various things that you must do to produce the gold. And at that number, gold is dramatically undervalued.