héhé , les analystes commencent à se rendre compte du loup.. énorme, qui se cache derriére le carnet de hedge de Barrick

Citation:

"the company continues to be handicapped by a hedge book that has seen the current realized value of the 9.5m ounces hedged decline from USD 374/oz to USD 364/oz in the past quarter. At a USD 1,000/oz gold price, the mark-to-market of the book is negative USD 6.0bn and changes by USD 0.95bn for every USD 100/oz move in the gold price.

www.lemetropolecafe.com

>Gold's biggest name in the spotlight
Is Barrick, the world's biggest gold miner by value and production, preparing for a bought deal of up to USD 3bn?
Author: By Barry Sergeant
Posted: Wednesday , 25 Feb 2009
JOHANNESBURG -
Barrick, the world's biggest gold miner, by value and production, appears to be under increasing pressure to replenish its capital base, following last week's results announcement that guided for lower production and higher costs during 2009. Barrick pointed out that as of 31 December 2008, it held the gold industry's highest credit rating, a cash balance of USD 1.4bn, a USD 1.5bn undrawn credit facility and net debt of USD2.9bn, and scheduled repayments of less than USD 300m over the next four years.
Barrick currently ranks among the world's top five miners of all kinds, measured by market value. Its current market capitalisation, at USD 30bn, has more than doubled from low points less than six months ago. A number of specialist analysts have, however, again pointed out that while Barrick is apparently headed for growth in free cash flow, it also faces an ongoing hedge book handicap. Analysts at RBC Capital Markets see free cash flow growing to USD 1.1bn in 2010, from USD 0.6bn in 2009. New mine development is expected to be supported by a strong balance sheet, say the analysts, with an estimated USD 1.7bn in cash at 2009 year-end, a USD 1.5bn un-drawn line of credit, and debt to total capitalisation of 20%.
"However", state Stephen D Walker and Valerie Blume at RBC Capital Markets, "the company continues to be handicapped by a hedge book that has seen the current realized value of the 9.5m ounces hedged decline from USD 374/oz to USD 364/oz in the past quarter. At a USD 1,000/oz gold price, the mark-to-market of the book is negative USD 6.0bn and changes by USD 0.95bn for every USD 100/oz move in the gold price. While the company has the flexibility to defer delivery until future years, in the current low interest rate environment, the realized value will not increase significantly over the next few years"…
-END-
Then, from a fellow Café member…
This from a normally well informed and accurate blog I read.

I don't follow ABX, and didn't see anything in recent headlines on this, don't have time this week to research or listen to their Q call, FWIW or perhaps forward this to those few are who likely do follow ABX to see if there is something newsworthy in this?
Aaaarb
____________________

Barrick floated the prospect of a bought deal financing for $3 billion today. Some of the proceeds look to be going to close down some part of the 9 million ozs of gold they have hedged. This should ahve been front page news huh? The fed recovering a whack of its deep storage gold. I mean the fed is barricks ultimate counterparty isn’t it? Who else would set up a contract that would allow barrick to keep extending hedge closure date indefinitely…. so why would the fed be wanting some of its deep storage gold returned… to anchor the new monetary system the G 20 is in the process of formulating right now. The days of competitive currency devaluations must end so the world economy can stabilize and restore the condition where economic growth becomes possible… what better way is there then using gold as some kind of anchor for the new currency order that must be created. hence the feds recall of their deep storage gold… Munk could have bought it back at prices closer to $700 an oz not too long ago. Instead he’s looking at a $6 billion close out fee… Say removing even half of the barrick hedged gold from the market would dramatically impact the gold demand and perhaps gold pricing too huh? so why did barrick float the trial balloon on closing down some part or all of its hedge book today… They rode right into the market on the tails of the gold price hit didn’t they? Now the gold community has been inoculated in regard to a barrick closure a lot of the stupid element of the gold bulls will not join the charge when barrick officially makes its move huh? Yup I’m guessing barrick will call for delivery on a heaping whack of gold futures that are already in place.

_________________
Pépite Bull

Barrick poursuivi pour info mensongéres sur hedging



http://www.gata.org/node/7266

Excellent....

La poursuite ne date pas d'hier.
La nouveauté, c'est que Barrick à "Settled" (réglement "amiable") la poursuite contre eux.

Autre point intéressant : Les termes de l'accord (settlement) ne sont pas encore connus, car "Terms of the settlement haven't been released because Toronto-based
Barrick must conclude talks with its insurers before signing the accord"

Ah ????

Et c'est qui les "insurers" (assureurs) de Barrick ??

Ce serait-y pas AIG par hasard ?

Je parierais bien un gramme d'Or là dessus...

barrick va diluer ses actionnaires avec une ak de 3 milliard de $ pour racheter une partie de ses hedges ..

héhé, depuis le temps qu'on le dit.. que ça finirait comme ça ..

et il restera encore 2.7 milliards de $ de hedges flottants ! ( en admettant que pour une fois, ils donnent les chiffrages réels ! )

After the deal, Barrick will still hold floating hedges with a negative mark-to-market value of $2.7 billion, but the $5.6 billion charge will remove it from the balance sheet.

http://www.reuters.com/article/ousivMolt/idUSTRE58767F20090908

lol, les voilà qui augmentent leur AK sous prétexte qu'elle a du succès ..

j'adore la façon dont ils tournent ça... quand je disais que leur comm sent le rat crevé ..



Barrick Gold Corp. (ABX) the world’s largest gold producer, said it will increase the size of a share sale announced Tuesday by 17% to $3.5 billion in response to investor demand.

The Toronto-based company will sell 94.8 million common shares for $36.95 each, up from the 81.2 million shares announced Tuesday, Barrick said in a statement. Lead underwriters RBC Capital Markets, Morgan Stanley, J.P. Morgan. and Scotia Capital have an option to increase the sale to $4 billion within 30 days.

Barrick is raising funds to eliminate fixed-price contracts after eight years of successive gold-price increases.

un petit rappel bien senti de Murphy .. qui savoure, à juste titre la victoire du Gata à ce sujet .. et qui y voit une nouvelle extrememnt bull ( non, pas forcément pour demain matin , les gars )
car si barrick se décide enfin à couvrir ET à admettre ce qu'il a tjs "artistiquement" dissimulé.. c'est bien qu'il y a un GROS pb ... probablement derrière les fameuses contreparties "secrétes" de barrick qui lui avaient pourtant fait des ponts en or ( promesses intenables now ... c'est ça la vraie nouvelle ! )


www.lemetropolecafe.com

GATA began its battle with Barrick and its massive hedging program 10 years ago, accusing them of playing a vital role in the gold price suppression scheme in complicity with The Gold Cartel. I began to review some of our banter over Barrick the past decade last night and began assimilating points of interest … suddenly realizing it was 25 pages long for starters. Needless to say, this had to be severely curtailed for this MIDAS commentary.
The essence of it all is GATA soon realized that Barrick Gold was an ogre to the gold price in league with the US Government and various bullion banks (like Goldman Sachs) below $300 per ounce at the time. This was the essence of Robert Rubin’s Strong Dollar Policy as mentioned in the "GATA MEDIA SPECIAL - The Reason for Gold’s Imminent Price Moon Shot? It’s a Simple Supply/Demand Story." Barrick aided the bullion banks by adding physical supply in the form of forward sales which suppressed the price … which made little sense at the time. As Adrian and others frequently pointed out, did the oil companies hedge their product at $10 per barrel, locking out any real chance of turning decent profits?
This gets a bit complicated because due to various option premiums, contangos etc., Barrick was able to achieve prices 10 to 17% above the spot price, but it was clear even way back they were shooting themselves in the foot, as just evidenced by their STAGGERING $5.6 billion dollar latest loss on hedges they said they didn’t even have as late as 2007 (that is a whole different story).
The bottom line is GATA has taken on the rich and powerful since the get-go and that was Barrick in the gold world. Their honorary Board members included:
*George Bush, US President
*Brian Mulroney, Canadian Prime Minister
Karl Otto Pohl, president of the Bundesbank, Germany's central bank
*Vernon E. Jordan, Jr., former Democratic National Committee chairman
*Howard H. Baker, Jr., US Senator and former Reagan chief of staff
***
And, as veteran Café members know all too well, GATA has been constantly mocked/derided by the mainstream gold world pundits, the World Gold Council, the bullion dealers, and Muppet groupies for pillorying Barrick.
You might ask, "How could Barrick be with the rich and powerful and be so dumb?"
Simple…
*Barrick’s plan was to join forces with others in The Gold Cartel and drive the price down so low as to wipe out others in the industry and then pick up their valuable, way undervalued resources.
*Frank Arisman of JP Morgan, a managing director of JP Morgan Chase and a Board member of AngloGold (another key Gold Cartel player) was a key figure in these dealings. JP Morgan’s office was right above Barrick’s in Toronto.
*Barrick made a pact with The Gold Cartel devil, meaning they couldn’t lift their hedges. They were stuck, which is probably why they have stupidly carried them all these years.
*Ah, about those best laid plans. The European central banks scuttled the operation with their surprise Washington Agreement Announcement in September of 1999. The gold price went ballistic with surging option volatilities threatening the financial system, causing the Bank of England’s Eddie George to remark "We were at the abyss."
*Surprise? Oh Yes. Chase Bank talked Newmont Mining into instituting a sizeable hedge program only days or weeks before the announcement … at the bottom of the market with gold around $265 per ounce.
The Gold Cartel recovered and convinced a number of central banks to dump their gold, which kept the gold price at bay under $300 a couple more years, but the handwriting was on the wall. The best they could do from thereon in was to manage a retreat.
Now, here is the good stuff and why I constantly say that unless you know what GATA knows about the gold market, you really don’t know the key to the whole market, which means you don’t know much in the big picture sense.
The Barrick announcement is extremely bullish in my book because it strongly suggests Barrick’s bullion dealers, their counterparties, are in a twit about what is coming down the road price-wise. They know what the US government is throwing at the gold price to keep it down and they are having trouble due to the enormous physical demand and the changing dynamics in the market regarding MAJOR players … such as the Chinese, Russians, super hedge fund managers etc., and the withdrawal from the market of other sellers like the Europeans.
While The Gold Cartel is holding the fort for now, that fort has been encircled by "The Indians," and their troops are building in size. IT IS ONLY A MATTER OF TIME before the fort falls and the cabal forces are routed. Barrick’s counterparties want the damage to be limited to the staggering loss it is now. What fun! Remember when Barrick strutted their stuff about their "Evergreen Clause" in which they could roll over their hedges forever without a margin call? Bury that gimmick too.

eh oui, promesses tellement intenables ( hello JPM, l'une des contreparties sinon LA contrepartie de barrick ) que l'annonce de barrick s'apparente bel et bien à un default :
aucune livraison du gold promis .. réglement en cash ..

adrian douglas pour le midas :

Chris, Bill,
DEFAULT!!!!!!!!!!!
Angolgold has been reducing its hedges by delivering gold from production into the hedge contracts. In other words paying back the loans with gold.
It looks to me that this is the first major sign of physical market stress that I have been pounding the table about recently which was eloquently summed by Paul Walker, CEO of GFMS "large lumpy transactions in a market that has a degree of illiquidity". Barrick's deal represents a gold delivery DEFAULT. They are paying back cash. They are not paying back in gold.
QUOTE
The current negative $3.7 billion MTM position of the gloating contracts does not change with gold prices. No activity in the gold market is required to settle these floating contracts.
END
This is in my opinion is a bombshell. What will be the domino effect as the bullion banks that were meant to receive gold don’t have it to meet their obligations?
Cheers

Adrian

*********
même son de cloche chez Kirby

What the news release DOES NOT SAY is that when the "hedges" were put on – it was via mobilization of sovereign bullion that exited the vaults and was sold into the market. NOW, Barrick is going to use "futures" to immunize its balance sheet out of proceeds of an equity offering that is going to be "bought" by the same cretin bullion banks that brokered the physical bullion hedges in the first place.
But do note that there is NO WAY that amount of physical bullion will be returned to the sovereign entities that parted with it at the front end of this transaction. The physical market is way too tight for this to happen in the 12 month time frame that Barrick has stated.
Neat swindle, eh?
For the Bullion Banks it’s like, "Heads I win, Tales you lose".
Congratulations on diluting your existing share holders [82 million new shares vs. 873 million outstanding or about 10%] to the entire Barrick management team.
Amazing,
Rob Kirby

Important, en effet; le pilier central de l'édifice frauduleux était fissuré...mais pas la peinture du pilier...alors, forcément, nous passions pour des illuminés et des paranos...mais voici que la fissure, qui se transforme en crevasse est devenue évidente...même aux yeux des plus béats parmi les crédules...dès lors, en effet, désormais, et plus encore que jamais auparavant, IT IS ONLY A MATTER OF TIME...

cette annonce de barrick est abasolument déterminante, dans le mouvement de hausse actuel ..
Nouveaux commentaires de A Douglas

www.lemetropolecafe.com

Barrick Gold, what FUN...
Bill,
As always with Barrick they use deception. In 2007 they were using language that sounded like they had eliminated all hedges as they announced the elimination of all corporate hedges…but in the fine print was all the project hedges. In this news release they have a headline of “Barrick Announces Plan to Eliminate Gold Hedges”. From the table below you can see this is not true as 2.7B$ of hedges remain.

It appears they will buyback or produce gold to eliminate the 3Mozs of gold hedges and pay-off in dollars 1B$ against the floating contracts because they say “The obligation under the Floating Contracts is economically similar to a fixed US dollar obligation. No activity in the gold market is required to settle the Floating Contracts”. So my question is why in the accounting summary table above is any of the 1.9B$ of the proceeds of the equity sale booked against the gold hedges?? Why not book 2.9 B$ against the floating contracts and leave the gold hedges to be produced into. In fact they have made a later news release that they are raining 4.5B$. This would allow the elimination of all the floating rate contracts so if these can be paid in dollars as they claim why not show these contracts will be eliminated and the gold hedges will be paid out of production which would represent about 3 months of production? Things are never what they seem with Barrick! In my view the reason for them putting 1.9B$ against the gold hedges is that they are being paid off in dollars…ie a default. The rest of the hedges are being partially paid off in dollars (seems that this is allowed under the contracts) and then they are going to raise more money to pay off the balance also in dollars. I conclude JPM is going to get mostly fiat dollars and not much gold!
Cheers
Adrian

interview de Rob Kirby sur le sujet ..
il déclare qu'avec l'ak, barrick ne pourra dénouer qu'un tiers de sa short position gold ..
il explique par ailleurs comment la FED controle les taux via JPM et les dérivés de taux d'intérêt

http://www.gata.org/node/7786

Butler ce soir ..( Butler qui suit ce dossier depuis le début, je le rappelle aux newbees) ..

http://news.silverseek.com/SilverSeek/1252940702.php

une rumeur.. sur le fait que ce serait le FMI qui viendrait à la rescousse de Barrick avec ses 400 T

www.lemetropolecafe.com


JUST IN, a rumor from yet another VERY plugged-in Café member…
There is a just a faint whisper in London that IMF has bailed Barrick out of its hedge-book. That’s how the CEO of Barrick can say that the close out will not affect the gold market.
Obviously it needs verifying but:
· Goldman said to biggest holder of Barrick’s toxic hedges are a central bankers’ bank
· Goldman, said to be the biggest holder of Barrick’s toxic hedges, is a central bankers’ bank
· IMF can tell them – "Don’t worry, it’s coming from us"
If you take Barrick’s $5.6 billion MTM loss and add to it the amount they got for the gold when they borrowed and sold it and then divide the total by $1,000 the answer is awfully near the number of ounces IMF says it wants to sell.

tiens, j'aurais des transmissions de pensée avec Jim Willie ??
lui aussi fait le rapprochement entre cette annonce pour le moins étonnante de barrick et l'affaire du défault chinois otc ..un truc auquel je pensais..

www.lemetropolecafe.com

Barrick Gold Ripe for Bear Raid
by Jim Willie, CB. Editor, Hat Trick Letter | September 17, 2009


Burn, Baby, Burn !!! Could it be that one response to the Chinese shot across the bow of the corrupted and leaky USS Derivative ship at sea is the announcement that Barrick Gold to cover their entire hedge book… again? Maybe! They covered them all in 2007, didn’t they? They said they did! This is turning out to be an event every two years. Maybe in 2011 they will announce cover and closure of their entire hedge book again. Last time, the key words in the fine print were closure of all hedged gold positions from operating mines. That meant they were willing to lose billion$ in shareholder equity on all mines not yet open, but with ongoing gold price exposure. No wonder they installed a new CEO recently. They have burned through over 20 years of profit in this hedge book strategy, useful for the USGovt but disastrous for shareholders. The ongoing dilution of their stock will continue for a few years more. The next big question is where will Barrick purchase the gold to fulfill the contracts and retire them with metal delivery. It looks like the open market. Maybe the source will be IMF gold bullion. Maybe they own a raft of StreetTracks GLD shares passed under the table from hedge funds. Their operations suffer greatly, from capital drained for balance sheet repair rather than mine development. They boast being a giant among miners, but their production given their equity is pathetically low. They remain a finance firm masquerading as a mining organization, and have finally been caught with their pants at their ankles.
Why the Barrick Gold (symbol: ABX) stock is not cut in half promptly is a mystery to me. They implicitly admit a grand lie from two years ago, with remaining grand hedge book exposure. Perhaps because it remains somewhat a sickly darling among institutions, which are probably either dumb as fence posts or bribed by simple lavish lunches and government back scratches. The Barrick news should be considered as a link in a chain of events likely to unfold in the next several months..
-END-
Jim is correct. Barrick has been playing coy with the gold analysts and the public about their hedgebook for a couple of years now. They flat out said two years ago they had eliminated their hedges. Naturally, all of us on Planet GATA rolled our eyes because it was clear they still had nearly 10 million ounces (something like that) on their books, yet the Planet Wall Street analysts and the rest of the mainstream gold world gave them a pass.
Two years later little has changed regarding that pass. Once again Barrick says their hedge book is history, but is hazier than ever…
*One of the most highly respected guys I know in the industry says they haven’t covered anything yet.
*Adrian says whatever they have covered has been done with a cash transaction and thereby they defaulted on their gold loan.
*Then a very plugged-in Café member in London mentioned "a faint whisper in London that IMF has bailed Barrick out of its hedge-book."
*The Muppets are falling all over Barrick because they say they have covered all their hedges.
Well, for sure Barrick has put out another smokescreen. What is inexcusable is how The Muppet world and gold analysts bow down to Barrick and let them get away with anything they want the public domain to think. It is sickening.
Barrick still has some major league problems due to their errant hedging and complicity with the rest of The Gold Cartel. One day this will all come out in the wash.