I'm a cost accountant and even I get fooled, but not twice by the same trick. Suffice to say that things aren't always what they seem, and that "cash cost" is a number they die very quickly and very surely below. Above it they just die more slowly without profit.
Nice.. I'm buying Rhodium. My time frame is long because I haven't been able to cut it like all of you profitable guys (and believe me, I've tried and lost a lot attempting)... Some of us just aren't cut out to read the tea leaves so well. But my point stands. Why trade gold on leverage when you can trade Rhodium without and get the same gain potential?
Its like a perpetual hedge option out till 2017. It means they can't sell those projects, I'd guess, but beyond that it means they get away with it having no effect on current earnings that they sold 9.5 mm oz forward well below current prices. I think they are ADDING to the cost and value of those projects the cost of the hedge. It will eventually mean that when they do mine them, the cost will be that much higher, I think, but of course, that won't be part of "cash cost", LOL. If it was a few hundred thousand oz, I don't see it would matter, but when its 9.5 mm oz and its a large percentage of the gold in the projects, and the projects are immensely expensive ones (like cost $5 billion just to get the power line), I wonder what the business purpose of it all is, and if the accounting is really honest.
I wish Barrick had a straightforward balance sheet, cashflow statement, etc... like a counterpart such as Newmont. Everything is all over the place. They don't like the word depreciation or depletion even (instead they use amortization). It's a real pain in the ass to just find anything in those statements.
heheh... its a small position of a diverse precious metals portfolio. My entry point is at these prices, so let the races begin..