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 : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (7920)	12/4/1997 7:16:00 AM
From: David R. Schaller	Respond to of 14627

Marcos, you raise an interesting question regarding the unwinding of hedges. Barrick supposedly has all their production until 2000 sold at as much as $420/oz. Closing these hedges out would happen only if they thought gold had bottomed. They would then earn the difference (about $130/oz) on every oz sold. Since they are in the process of closing 5 mines, thereby reducing production, it would seem that they are in a perfect position to close some of these hedges out at a huge profit. Whether its enough to cover the cost of mine closings is another matter. (Maybe they'd like to move some of this equipment to Diablillos ;)) One of the big mining companies (Newmont?) recently unwound all their hedges thinking that gold wasn't going any lower. They guessed wrong. Made a bundle on the hedged position but will now lose bigtime on their production when they try to sell it. For myself, I've been buying PFG the last couple of days and will try to get more today. The offers seem to be being pulled..leaving the buyers to chase a little bit. This would seem to be a good sign. Its been so long since I've bought something that was going up I almost can't remember what its like. Regards to all, Dave