You are here

Barrick accelerates reduction of gold hedges

Section: Daily Dispatches

Excerpted from
Barrick Gold Corp. Press Release
Thursday, February 22, 2007

Hedge Book Reduction

During fourth quarter 2006, Barrick reduced its fixed price Corporate Gold Sales Contract position by 1.0 million ounces, and incurred a pre-tax opportunity cost of $327 million ($0.37 per share) against its gold sales.

For the full year Barrick reduced its fixed price committed gold sales contracts by 9.4 million ounces, including the elimination of the legacy Placer Dome gold hedge position.

At February 21, 2007, the company had completely eliminated its fixed price corporate gold sales contract position, more than two years ahead of its previously announced target date.

Furthermore, the company plans to eliminate the remaining floating spot price contracts by the end of the second quarter. As a result of these deliveries, the company expects to incur an after-tax opportunity cost of $564 million in Q1 2007 and $65 million in Q2 2007.

"Barrick is very positive on the long-term outlook for gold," said [CEO] Greg Wilkins. "The elimination of all non-project related hedge contracts allows the company to benefit fully from higher gold prices at its operating mines."

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at GATA is grateful for financial contributions, which are federally tax-deductible in the United States.