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Barrick Gold Corporation Message Board

  • michael_daniel_knight michael_daniel_knight Apr 16, 2013 5:38 PM Flag

    Can someone tell me what Barrick problems are?

    2003 - Gold $350 ABX $18 - 2013 Gold $1350 ABX $18 - so gold price is $1000 more per oz - but stock price is the same - so I assume cost have gone above $1350 and operating costs have gone up more than 300% in the last 10 years to explain the current price?

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    • You can't...Totall illogical. The NAV of the company is $26.50 for goodness sakes.
      Just bought more today mid $18's...

    • ABX has a lot of debt used buy a sprawling unproductive money pit. It is very likely to have to raise money, but in such an unfavorable environment, you can draw your conclusions as to outcome. It also has fairly high cash costs that is a stone throw away from current gold prices that are still declining. The stock will fall below 10.

    • pingnamchan Apr 16, 2013 10:01 PM Flag

      Abx needs to sell some non-core assets as soon as possible. They have got to reduce the terrible debts, otherwise the share price will get shorted with no day ending...
      The Barrick management team is one of the worst in Canada...NO LONG INSIGHT AT ALL!!!

    • The problem is they bet the farm ($13.75 Billion dollars worth of it) on what was supposed to be the lowest-cost production mine in the World. Also the Highest altitude (-5 degree average wind chill) in the World. It has turned out to be the most expensive mine to build so far, and construction has been halted on the Chile Side. (Yes, it straddles the mountainous border of two countries.) Barrick was planning on producing gold for around .02 cents an OZ, by expensing out the silver ore production, and the gold would become a byproduct of their silver operation. They have also sold future streams of Silver to SLW, and future gold streams to the gold streamers. The kangeroo court in Chile putting a block on construction is like if you had a $100 Million dollar a month mortgage on your property in Miami that the Prince of Oman wants to rent from you, but the environmental court won't let you until you pay their inspectors to come inspect for mold sometime next year in their "busy" schedule. That is the problem.

      • 2 Replies to a_littleguy
      • this is an excellent explanation of the current predicament, on top of the overall gold collapse. feels very artificial and temporary to be trading below book value

      • electrowing Apr 16, 2013 7:47 PM Flag

        right, and if a Chilean dont bend over for Barrick, it is a "kangaroo court". Guess what - the corrupt little old boy network that protects business in Canada doesn't always extend beyond its borders. That explains to some extent why Canadian tech companies always fall flat on their faces the minute they try to sell their wares overseas. No Canadian gov protection = no competitive edge. Barrick is no exception. Mismanagement is the Canadian way.

    • it wount be at 18 for long this stock will be back over 30 sooner than you think.

    • Those in the know about all of Barricks problems at Pascua Lama have used the opportunity to take advantage of the market. The perfect storm in Chile with Barricks title fraud issue and the closure of construction on the chile side of Pascua Lama was a for sure bet against Barrick, Precious Metals followed ABX down and a lot of people look to benifit when Gold adjust up while ABX tanks farther down due to its title fraud.

    • all in costs are supposed to be 1277 per some analyst. so they are only making 100 bucks an oz.

    • The main problem is margin calls and wall street doing the usual scam. Just like BBY and HPQ last year. Your gut is correct. $18's is a very low price for ABX. Sure if gold collapses to $600 it could be Enron. But chanes are that won't happen with every central bank printing all they can in unison. If you have dry powder, i would buy all you can in $18's tomorrow. I bought alot at $24's becausei couldn't believe how low it was then. Good luck.

    • pingnamchan Apr 16, 2013 5:57 PM Flag

      I don't get it why the cash cost was raising sharply over the past 2 years. The share price started to drop more when the gold miners CEO promoted what the ??? all in sustaining cash cost ???

      • 1 Reply to pingnamchan
      • When the gold price is higher the low grade areas in a mine become economic, so they start mining them, which increases their cost per ounce, but it's ok as it increases their profits. When the gold price is lower they have to increase the cut off grade, reducing their cost per ounce, which reduces their level of profit but maintains positive profits. In 2003 gold at 350 was a distortion as it was finishing a 12 year bear market and was the most unwanted commodity as most people were in the tech bubble. To compare with that year one should consider that gold should have been $500 to have a fair comparison, so gold more than doubled, but it requires lots of diesel fuel which also more than doubled, and labour which more than doubled especially in south america, and environmental costs which maybe have increased ten times, and if dividends were reinvested the stock price also doubled to $40, plus or minus the volatility we see, also gold can have long term broad cycles where it becomes unpopular for long periods depending on the economy, etc.

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