Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Activatecard who wrote (2582)	5/9/2002 8:56:38 PM
From: russet	Read Replies (2) \| Respond to of 3558

Do you know what "off balance sheet" means, and what assets are "off balance sheet"? I don't believe you do, or you would realize that the assets they are talking about are the investment income and gains generated by the investments due to changes in market valuation, and these notional changes in value due to fluctuations in market price are recorded "on the income statement" every quarter. The current value of the hedged reserves are not "off balance sheet" I discussed this is one of my previous posts. Of the multi billion dollar investment fund that came from selling leased gold, and writing call options, the investment income forms a small percentage of this and that builds every year. The gold asset is on the balance sheet at current prices, but they must allow for the fact that interest, call writing income, and capital appreciation or depreciation is not allowed for in any way, so they put it off balance sheet. In a declining gold market, the amount you got for the gold minus the current value of the gold is recorded quarterly, and charged to the income statement if it exceeds allowable limits. Conversely they must write it down when the POG rises until you hit the value you sold the gold at in previous years plus the investment income you have made on it,...because that's what you got for it and you can't devalue it below that for this reason. The idea that Pollitt suggests that you keep writing it down ad infinitum at the same rate with increasing in POG is false and misleading. Barrick locked in a price for gold when they sold it in previous years. The notional value of the gold will inflate if the current value of gold drops below what you sold it for, and declines if the current value of the gold in the ground is greater than what you sold it for and what you realized in investment income. Some of the oz of leased gold Barrick has sold in the last few years at prices like $260 per oz, or some of the now out of the money call options they have written and had called, are now worth less than the notional value they had last quarter, so they wrote them down. They can not write them down any further than the money they got for the gold when they sold it, and the investment income they have made on it since then,...but that is what the Gata nutcases are like Nickle are implying. Doesn't much matter what you Gata nuts think, as long as the market continues to reward Barrick with a higher shareprice as the POG goes up, your comments, false assumptions, erroneous speculations and unwarranted concerns don't mean much to the rest of us.