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DJ Barrick Says Eliminates Gold Hedges Far Ahead Of Schedule

Posted on: Tue, 01 Dec 2009 09:18:00 EST

Symbols: ABX

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LONDON, Dec 01, 2009 (Dow Jones Commodities News via Comtex) --
ABX | Quote | Chart | News | PowerRating -- Canadian gold miner Barrick Gold Corp. (ABX) Tuesday said it had eliminated its gold hedges, far in advance of a self-imposed September 2010 deadline and at a cost of $300 million above its initial target.

Barrick said it had eliminated 3 million troy ounces of fixed-price contracts, which required it to purchase gold in the open spot market or deliver from its own mines to close the contracts.

The elimination of the hedges will give Barrick full exposure to record high gold prices, Barrick said.

Barrick announced in early September it would buy back its outstanding gold hedges over a 12-month period at a cost of $5.6 billion. The miner Tuesday said it had eliminated the hedges at an average $1,070/oz.

Barrick said the additional $300 million cost, a result of the higher prices at which the hedges were eliminated, will be charged to its fourth quarter earnings.

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

Barrick also eliminated most of its liability on its gold floating contracts, totaling 6.5 million ounces. These contracts don't require a purchase of gold to be eliminated.

Barrick funded most of the hedge buybacks with a $3.9 billion equity raising in September and a $1.25 billion debt offering in October.

-By Matthew Walls and Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9412; matthew.walls@dowjones.com

(END) Dow Jones Newswires

12-01-09 0918ET

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