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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (56898)	2/24/2008 11:47:50 AM
From: tyc:>	Read Replies (1) \| Respond to of 78413

Hi Tom, I'm one of those guys who sold my Barrick just because of their continuing hedges. And the market has proven that to be a mistake (so far). However, I must add that when ABX sold forward to yield a capped price of $340 per ounce, that seemed a pretty good price too. Now we must ask whether Abx can produce at that cost now. See this quotation from an old posting on another thread. "The recent high profile blow-ups of mine costs at NOVAGOLD and Gammon Lake are poster children of this trend, but unfortunately are more representative of the rule than the exception.Nearly every mining company is experiencing the same problem these days, making industry returns on investment close to 0% even with gold at $800/oz. Capital has been strangled from the sector this year, making it likely that even more mine projects will be shelved, and thus the vicious circle will continue until gold is a MUCH higher price. Let me get this straight - $800 IS NOT A GREAT GOLD PRICE! In 1980, when the U.S. money supply was roughly 15% what it was today (not including massive growth in other worldwide currencies), $800 was a good, if not great price. But in today’s world, $800 is the equivalent of roughly $30 oil (oil is currently $95/barrel), in other words a price level where few, if any projects have any chance at material profitability. And, as investors know, stocks do not go up when an industry cannot operate profitably.

To: loantech who wrote (56898)	2/24/2008 12:53:30 PM
From: goldsheet	Read Replies (1) \| Respond to of 78413

> Can you refute this article please I will decline. Debating politics and hedges has really ruined my SI experience. As a result, I seldom contribute anymore. The point of my post was Newmont vs. Barrick (which is more complicated than just looking at hedges) At least two years ago I mentioned to you Barrick was looking better. Newmont claimed to have no hedges and became a favorite, but folks seemed to forget to look at their operations - declining ore grades in Nevada, Australia, and Peru leading to lower production. They spun off the royalties (Franco-Nevada is alive, again) and took huge writeoffs. $60 stock then, $50 now, Meanwhile, those focused on hedging did not notice Barrick actually knows how to mine gold, They added Placer Dome, Arizona Star, and now Cortez from Rio Tinto. They also have opened mines and have a good development pipeline. $30 stock then, $50 stock now. It was not long ago NEM had a larger market cap than ABX, but now ABX is double NEM. goldsheetlinks.com finance.yahoo.com Hedging may be good or bad (and obviously endlessly debatable) but there is no excuse for not even analyzing a company and missing out on a nice gain. You know WGI, you did the analysis, if you are comfotable with the decision then stick with it, and don't let other talk you out of it.