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: Enigma who wrote (2963)	5/21/2002 9:36:20 AM
From: nickel61	Respond to of 3558

Why does the obvious significance of this have no impact on you? In a direct sense they could not claim this high sale price if the gold wasn't borrowed. If they just sold their gold in the spot market they would have to report that and then if they wanted to invest in US treasury notes they would simply show that as an asset on the balance sheet and recognize the marked to market value of the interest payments and the bonds. But this way they get to claim that they have gotten a higher price for their product. Complete bullshit and nothing more then an accounting trick. Once it is exposed it is obviously nothing more then taking advantage of a loophole in the FASB accounting regulations. Much like the absurdity of being able to recognize both sides of an energy trade as "revenue" allowed Enron to rapidly inflate their reported revenue growth. This is how Enron ever got to be able to claim they were the 7th largest corporation in the United States. They were working an accounting loophole and the bankers and accountants, JP Morgan/Chase, Barrick's bankers by the way, and the now infamous Arthur Anderson, were the only ones who knew they were cooking the numbers, and they shut up about it so they could sell more bonds, stocks and whatever, or charge them 50 million a year in accounting fees. The process of accounting for both sides of an energy transaction as your revenue is analogous to a stockbroking firm trading a 1000 shares of a $100 stock and claiming not the commission as their revenue but the sum of the value of the stock sold and bought in the transaction, i.e. not $35 but rather 1000 X $100 = $100,000 for the sale and $100,000 for the buy...that is what made Enron's revenues grow so spectacularly.$200,000 or revenue on a trade that really under common sense accounting would have produced only $35 of revenue for the brokerage firm .....and it was allowed to continue for years... until it came under the light of day and collapsed taking the Enron employees and investors with it.

To: Enigma who wrote (2963)	5/21/2002 9:45:45 AM
From: nickel61	Respond to of 3558

Tuesday May 21, 1:28 PM Rising gold prices means less hedging-analysts SYDNEY, May 21 (Reuters) - A rising gold price meant Australian producers will continue to reduce their forward sold hedge positions, analysts said on Tuesday. Gold jumped about US$5 to nearly $317 an ounce overnight, the highest in 27 months, leaving more of Australia's estimated 24.3 million ounces of hedges outside the money, the analysts said. Gold has risen 14 percent since the start of the year when the price was $278 an ounce. Australia is the world's third largest gold producer, mining some 300 tonnes a year. Hedging -- selling as yet unmined nuggets at fixed prices to lock in revenue and protect against a dropping bullion market -- has fallen out of favour among the world's biggest mining houses, who claim it stymies upward price moves. Also, rising markets in the past have punished some heavily hedged companies, which actually lost money when they were forced to buy gold at higher prices than they were able to sell under options agreements. However, a weakening U.S. dollar has taken the shine off unhedged portfolios in gold producing nations outside the United States, analysts noted. Still, the latest price jump pushed shares in leading Australian miners -- all with some degree of hedging -- higher as gold's climb outraces deterioration in the greenback. Gold in Australian dollars was worth only A$545 an ounce on January 1, when one Australian dollar fetched only 51 U.S. cents. The same ounce on Tuesday is worth A$574 an ounce, despite one Australian dollar buying 55 U.S. cents. In afternoon trading, Aurion Gold Ltd was nine cents or three percent higher at A$3.19, Newcrest Mining Ltd was up six cents or 0.9 percent at A$6.94, while Lihir Gold Ltd was four cents or 2.9 percent higher at A$1.44. "Australian miners were benefitting from higher prices," Australian Gold Council chief executive Tamara Stevens said. At the close on May 20, the Australian Stock Exchange/Standard & Poor's gold index had risen 36 percent in 2002. ($1=A$1.82)