NYTimes prints Bloomberg story about Barrick''s reversal on hedging

12:24a ET Saturday, November 22, 2003

Dear Friend of GATA and Gold:

Something really strange is going on with Barrick Gold.

Thursday at a financial conference in London, Barrick
Chairman Peter Munk made what MineWeb called a
quot;spiritedquot; defense of the company's policy of selling
so much of its gold in advance of its production. But
today Munk told news reporters at the same conference
that Barrick won't be doing any more hedging.

Why such a public and humiliating reversal? (A GATA
agent at the conference who heard Munk's presentation
Thursday and read Munk's remarks today thought the
guy had gone crazy overnight.)

Why make such a gold-bullish declaration on the eve of
contract expirations on the Comex, where the shorts
with whom Barrick long has been allied are struggling
desperately to keep gold below $400?

And why (as MineWeb's Ken Gooding reported) did
Barrick President Greg Wilkins have to excuse
himself from the London conference to rush off to an
urgent meeting in New Orleans?

All this has prompted a lot of speculation: That
Barrick's bankers have pulled the plug on the company
because the gold price has increased the debt of
Barrick's hedge book too much; that Barrick heard
something Thursday evening about gold's future and
wanted to reposition itself quickly; and that Barrick
has realized that its share price is doomed unless
it changes its image in the market, among other
possibilities.

As for Wilkins' urgent trip to New Orleans, it's
not Mardi Gras time. Could it have something to
do with the price-fixing lawsuit brought against
Barrick and Morgan Chase by Blanchard amp; Co. in
federal court there, the lawsuit that has just
been allowed to enter discovery and deposition?

It's all just speculation, but it's hard to imagine
that Barrick would have ARRANGED things to make
itself look so scatter-brained. This can be only
good for our side.

Meanwhile, you may get a laugh out of MineWeb's
recent interview with South African gold analyst
Nick Goodwin (appended in part), who has suddenly
noticed that someone is capping the gold price,
even if he doesn't seem to want to know who it is.
A trader at Mitsubishi International Corp. quoted
in a Reuters story today (also appended) also notes
that the gold price is being quot;capped.quot;

The word is out; GATA isn't the only one that
has noticed.

One more thing: Don't miss Jim Sinclair's
commentaries tonight, particularly his quot;Note to
the Community,quot; here:

a href=http://www.jsmineset.com/home.asphttp://www.jsmineset.com/home.asp/a

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

COMEX gold jumps after producer changes sales policy

a href=http://www.reuters.com/newsArticle.jhtml?type=topNewsamp;storyID=3873459...

NEW YORK, Nov. 21 (Reuters) -- COMEX gold rose Friday after
Barrick Gold Corp., one of the most active hedgers, said it was
no longer committed to selling the metal forward to protect future
production from falling prices. The news underscored that
producers were more inclined to avoid hedging than to lock in
prices for reserves at the highest levels in almost eight years.

quot;It's pretty big news and I think it took the market a little by
surprise this morning,quot; said Bernard Hunter, a director at
bullion dealer ScotiaMocatta in Toronto.

quot;Later on there was some confusion about whether it was
confirmed or just a rumor. Maybe that contributed to taking
some of the sting out,quot; he said.

December gold ended up $2.30 at $396.00 an ounce. It
rallied from a low of $393.10, just before Barrick said it was
changing its policy, to $398.20.

Spot gold rose to $395.80/6.60 from $393.30/4.00 at the
previous close. London's afternoon fix was at $395.50.

Along with the falling dollar, quot;dehedgingquot; has been a
major factor in the 2003 bull market, which saw gold trade
above $400 on Wednesday for the first time since March
1996.

Barrick Chairman Peter Munk told reporters in London that
the Canadian company was cash rich and would do no
more hedging over the next decade. This raised eyebrows
only a day after Munk extolled the virtue of hedging at a
conference.

Barrick was considered perhaps the most sophisticated
trader among the major mining companies, with one of the
largest hedge books. Using options and forwards, it
generated profits even when the spot price of gold in the
late 1990s was below the cash cost of prying nuggets out
of the ground.

quot;It should be absolutely bullish,quot; said James Pogoda, vice
president of precious metals at Mitsubishi International
Corp. quot;I thought we would be a bit higher. Any time we've
gotten close to $400 it's been capped.quot;

Gold rose steadily with less producer selling to cap the
market this year, as investors diversified out of the dollar
and sought safe havens as global political tensions
mounted.

Gold gained momentum as the euro rose to a lifetime
high this week, before both succumbed to profit-taking as
the dollar bounced back a bit.

The euro was last quoted slightly firmer on the day at
$1.1917/21, not far below the $1.1977 record high. Most
dealers are waiting for the euro to break above $1.20 to
start buying again. But they will look for a break out of
the week's $400.70-$392.00 range to set direction.

Next week could be very volatile or deathly quiet. Options
expire Monday on the COMEX and in London cash
markets, and positions must be rolled over before
December delivery notices start on Wednesday, ahead
of a four-day U.S. holiday weekend.

quot;The market still wants to go to $400 and you've got to
think it will occur,quot; Hunter said. quot;With three days next
week until Thanksgiving, that's a real coin toss.quot;

* * *

Munk defends Barrick hedge

By Ken Gooding
MineWeb.com
Thursday, November 20, 2003

a href=http://www.mips1.net/mge03.nsf/UNID/DTHE-5TH7SY?OpenDocumenthttp://www.m...

LONDON -- Peter Munk, chairman of Barrick Gold, today
made a typically spirited response to critics who suggested
the Canadian group's hedging policy had hit its profits when
the gold price rose. Munk, dubbed quot;the High Priest of
Hedgingquot; because of the way Barrick pioneered and
expanded gold hedging over the years, insisted that quot;in 42
straight quarters since we started hedging we have not sold
one single ounce of gold for less than the spot price.quot;

And he promised that in the 42 quarters ahead Barrick
would not have to sell below the spot price.

Munk pointed out that more than 80 percent of Barrick's
reserves were unhedged today and he insisted quot;we sell
more unhedged gold than any of our competitors.quot;

He stepped in at short notice for Greg Wilkins, Barrick's
president, who, it was said, had to give up a trip to London
in order to travel to New Orleans on urgent business. ...

* * *

MineWeb interviews gold analyst Nick Goodwin

a href=http://www.mips1.net/mggold.nsf/Current/4225685F0043D1B242256DE00043A2ht...
C9?OpenDocument

MINEWEB: Our gold guru is back, Nick Goodwin. Good
to talk to you, sir, on a day when we were hoping that we
would be able to say that the gold price is through $400.
But it's not far off, is it?

NICK GOODWIN: It's close, it's only five dollars away.
But, you know, there seems to be somebody with a big
hammer sitting up here, and as soon as the gold price
wants to break through they're hitting it on the head. I
don't know who it is, but it's obviously people who don't
want it to go up. And that's the way the world is. There
are always people who are wanting it to go up and other
people who don't want it to go up. ...

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