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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (34161)	5/19/1999 10:37:00 AM
From: John Hunt	Read Replies (3) \| Respond to of 116815

Re Barrick Hi DD, It looks to me like Barrick have sold their future production AND have also sold the central bank's leased gold. Leverage is fine when it is going your way ... Ever try to use a lever in reverse? ... Lots of huffing and puffing and you don't get too far. If the price of gold rises sharply, Barrick has to buy gold quickly in the market to close those lease positions or suffer a massive earnings drop ... I don't think they can wait to ramp up production ... just too much risk that way. Just MHO, of course. John

To: Enigma who wrote (34161)	5/19/1999 10:50:00 AM
From: Ken Benes	Read Replies (2) \| Respond to of 116815

Double D: If Barrick did not hedge any of its production, and gold was selling at the current price. What would the price of Barrick be. There cost of production is around 200.00 an ounce and their shares are priced mostly on the value of the reserves they have in the ground. I do not believe, Barricks price would be that much less than what it is today. Who has benefited from the hedging program, the companies, not the shareholders. Rather than engage themselves as the conduits of CB gold, what would happen if everytime a cb announced an imminent sale of 400 tonnes of gold +\_, the producers announced that they would use that newly available gold to close out a hedged position. What would happen if at the same time they began covering their positions, they announced production cutbacks. I will tell you what would happen. They would be acting like the oil producers who have said enough is enough. We are told gold has been demonitized and yet the banks do their very best to prevent gold from trading as a commodity. They announce gold to be a relic and yet it is treated as a currency whose value must be maintained in a specific range to other currencies. The producers are the grease in this process and they are not acting in the interest of the owners of the company. They are content to watch the shareholders search the headlines for doom and gloom while they engage is a grow rich and get fat mentality. They do not worry about the chagrin of the shareholder, because they assume he is busy reading the papers for the magic bullet that will rescue their investment. The sad truth, the senior producers acting as agents of the central banks have driven the price of gold to where it is and they are as responsible as anyone for damaging golds trading role as a store of value. Ken