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To: The Vet who wrote (12590)	9/3/2004 6:07:22 PM
From: tyc:>	Read Replies (2) \| Respond to of 312368

Gwalia's problems were caused not by the hedges, but by a failure of reserves resulting in a breach in the covenants of the hedge. (This implied that future production would not be sufficient to satisfy the hedges). What has that got to do with Barrick ? Barrick clearly states what percentage of production is used to satisfy (close) hedges each year. Moreover, Barrick's hedge covenants allow them to postpone the closure of the hedges if they so desire. Are you suggesting there is a problem here ? Why not just say that you don't like hedging instead of implying some mysterious problems or obfuscation ?

To: The Vet who wrote (12590)	9/4/2004 2:11:03 PM
From: russet	Read Replies (1) \| Respond to of 312368

Barrick's hedges run over 14 years,...it is not relevant to quote them as a percentage of annual production. Junior miner's hedges are usually due within one to two years, so in their case it makes sense to quote them as a percentage of annual production. Barrick's reserves will increase with the rising POG as they have almost double the inferred resource as their current reserves, and these resources will become reserves at higher gold prices,...and several of their deposits are still open to continued drilling. Note also their hedged ozs have been falling dramatically in the last three years. They are closing out their hedges. Note also that the proceeds of the gold sales that came from their type of hedging was placed in bonds,...mainly governments,...and each year the hedges remain, the bond portfolio grows in value so the revenue per oz hedged when closed will rise every year. Currently they get around US$340 per oz for the hedged gold they deliver back to the bullion bank, but in five years they will receive about US$415 per hedged oz delivered, assuming a 5% rate of return in the bond portfolio. All of this information is available at the Barrick website. barrick.com