Barrick says it has eliminated gold hedges

By Euan Rocha
Reuters
Tuesday, December 1, 2009

http://www.reuters.com/article/marketsNews/idAFN0148789420091201

TORONTO -- Barrick Gold Corp. said today it has completed the elimination of all of its gold hedges as planned, a move that should remove what has been a big drag on its shares.

During times of weak prices, gold miners often sell a portion of their future production to protect, or hedge, against the possibility that prices will fall.

When prices rise, as they have done since 2001, the company suffers because the value of the future production it has sold does not increase with the gold price.

"Our positive view on the gold price led us to accelerate the elimination of these contracts ahead of the schedule we had established," said Chief Executive Officer Aaron Regent.

"With their elimination we no longer have any gold price related mark-to-market exposure and will now fully benefit from increases in the gold price," Regent said in a statement.

Barrick issued equity and debt worth more than $5 billion to fund the elimination of the gold hedges.

The world's largest gold miner said it expects gold production in 2010 of 7.7 million to 8.1 million ounces at lower total cash costs than 2009.

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Barrick's press release:

http://finance.yahoo.com/news/Barrick-Completes-Elimination-iw-211768404...

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