SW Richmond

Long-Term Gold Bull - And Proud to Admit It

MHFT,

You forgot to tell us about Barrick's hedgebook; please allow me to take care of that for you. Did you catch the earnings call? Perhaps they're not such a well-run company after all.
seekingalpha.com/artic...

How does the 800,000 ounces of production over five years compare to the 9,000,000 ounces they are hedged short, having promised it at $325.00?

Let's see, 9,000,000 ounces at a net loss of $600.00 per ounce. They should work for the Treasury.

www.reuters.com/articl...

See my comment previously on Barrick:
seekingalpha.com/autho...

Here's a quote from the earnings call cited in that comment:

The earnings call:

"Greg Barnes – TD Newcrest

Okay. Just a quick question to Aaron. What’s your view on the hedge, Barrick’s hedge, the 9.5 million ounces? If your view is that gold price could go to $2,000 just an example, what do you want to do with it?

Aaron Regent

Well, I think the hedge -- let me maybe start by saying, you know, the policy with respect to gold hedging is not to do any more gold hedging. And I think it would be -- we prefer that and we will closely manage their hedge book over time. I think that what we will do is we will manage it in a prudent fashion. And to the extent that we want to do something more aggressive that takes off (inaudible) capacity and we have to balance off that option versus other potential opportunities for the company. So I think I’d say it’s something that is managed and looked at quite carefully.

Greg Barnes – TD Newcrest

So you would weigh it off against -- in terms of paying it down or buying it back, I guess you would weigh it off against investment in Pascua Lama or assume your other development projects is how you would look at it?

Aaron Regent

I think so. At the end of the day, it’s a capital allocation decision. And so we have to look at -- if we deploy capital against the book, we deploy the capital somewhere else, what’s going to create most value for the organization. So I think that’s the thought process that we have to continually look at and review."


On May 20 11:56 AM Mad Hedge Fund Trader wrote:

> Barrick Gold (seekingalpha.com/symbo...) snared approval
> for its Pascua-Lama adventure after Chile and Argentina signed a
> tax treaty on how to treat the mine’s profits. When completed, the
> $3 billion, 13,000 foot high project will be one of the world’s great
> engineering achievements, extracting a forecast 800,000 ounces of
> gold and 35 million ounces of silver in the first five years. This
> will raise the company’s production by 10% at a time when precious
> metals are getting increasingly hard to find. Just another reason
> to buy one of the world’s best managed companies producing the most
> sought after product.

Quant Easing: Central Banks Unleash the 'Nuclear' Option

Dirk,

"The fixed income/hourly wage people (who still have jobs) have done very well the past year, though they may have more family living with them now and their asset holdings have plunged."

That is the most asinine thing I've read today.

"If they still have a job, and even though their savings have been shredded, and they probably have unemployed family crowding them at home, they've done very well."

Compared to what?

Quant Easing: Central Banks Unleash the 'Nuclear' Option

The ones getting nuked are anyone living on a fixed income or working for an hourly wage.

Big surprise.