Barrick Gold, the world’s largest pure-play gold miner, is about to make a very big bet on gold prices going higher. The company announced this week it will raise as much as $4 billion in a stock issuance and use the proceeds to pay off its gold hedges. In other words, Barrick is willing to give their shareholders the short-term shaft in order to rid themselves of all bets against gold.
“It’s nothing but bullish for gold,” says our resident mining watchdog, Byron King. Barrick evidently believes that the future price of gold is heading up. So Barrick wants to eliminate the drag of lower-priced hedges, presently covering 9.5 million ounces of future output.
“The math works out to about $370 per ounce, hedged. Barrick must think that it’ll make it all back in the future, out of higher gold prices — $1,350 per ounce and more. (more)
No comments:
Post a Comment