Dear Comrades In Golden Arms,
I stood in Barrick's head office with the then President Oliphant and another top executive. I had gone to Barrick to make them a cash offer for Kabanga Nickel.
Oliphant asked me what I thought about their hedge program. I told him at $305 Barrick was in trouble and at $354.90 he was in trouble.
Since then Mr. Oilphant has resigned as president of Barrick.
The other executive, still with the company, knows I am telling the absolute truth. I could have saved Barrick all these billions, but that is life.
Now listen to me: Gold is going to $1224, then to $1650 and after that to Alf's numbers.
Another point I wish to make is that some say Jim knows gold, but that is it. Those people are so very, very wrong!
Barrick Announces Plan to Eliminate Gold Hedges
September 8, 2009 4:53 PM ET
Barrick Gold Corporation (NYSE: ABX)(TSX: ABX) announced today that it has entered into an agreement with a syndicate of underwriters, led by RBC Capital Markets, Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and Scotia Capital Inc., for a bought deal public offering for gross proceeds of approximately $3.0 billion representing 81.2 million common shares of Barrick at a price of $36.95 per share.
Barrick intends to use $1.9 billion of the net proceeds to eliminate all of its fixed priced (non-participating) gold contracts (the "Gold Hedges") within the next 12 months and approximately $1.0 billion to eliminate a portion of its floating spot price (fully participating) gold contracts (the "Floating Contracts"). A $5.6 billion charge to earnings will be recorded in the third quarter as a result of a change in accounting treatment for the contracts.
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