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

To: russet who wrote (2596)	5/9/2002 10:32:30 PM
From: tyc:>	Read Replies (1) \| Respond to of 3558

>The hedging program is used by Barrick to realize higher than the then current spot prices for their hedged gold This is what turns me off. Every ounce they sell is at SPOT . They do not get a higher price for their gold ! They sell borrowed gold at spot prices and invest the proceeds. Why can't they just say that? Why can't you say that ? I have been investing in options for 15-20 years. And I know that selling covered calls is a recommended procedure for a strong market. I do not say that their activities are inappropriate even in today's market. I just object to their lack of candour. Here's another example. They said that they were going to sell more of their production on the spot market; implying that they were thereby going to reduce their hedging . There's only two things they can do with the gold they produce;(1) Return it to the lender and thus reduce their hedges or 2. sell it on the spot market and allow their hedge to continue. Perhaps you can tell me how selling their production on the spot market reduces their hedge ! It's all smoke and mirrors.. gobbledegook.