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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO) -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (56)	6/23/2002 11:27:48 AM
From: E. Charters	Read Replies (2) \| Respond to of 158

The only lettuce Sprott has to eat his words with are 50's 100's and 1000's. His record speaks for itself. So does Northgate's, who are not the heaviest of weights. Going into copper and weak gold is not my idea of a holiday. Their margin requirements are guaranteed? What the heck does that mean? That Brascan will be guaranteed to sue them if they don't pony up as gold rises? So they are a short de jeur? Let's simplify it. They borrow gold. They sell it to finance. They repay the ounces of gold as gold price rises. -- right so far? So, ok let's say instead they borrow money instead, does the price of money go up as they pay it back? Slight difference there? In order to offset the rise in the price of gold, they buy call options in gold. They have high leverage. Let's say they like a certain price and they decide to exercise 200 million in call options. Are you saying Brascan wrote these options and will pay them out if the other side of the trade cannot deliver the gold? I dunno about that kind of guarantee. Sound dangerous to Brascan. Somwhere somebody has to lose. If these kind of puts and calls are so safe, how come LTCM went bust? These guys wrote the formula on pricing options, (Black-Scholes), how did they get caught? EC<:-}