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American Barrick Resources Corporation.
Member rating: No Rating | Words: | Submitted: Mon Jun 19 2006
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American Barrick Resources Corporation Table of Content 1. REASONS OF THE PAST PERFORMANCE OF AMERICAN BARRICK CORPORATION 3 1.1. COMPARISON OF THE GOLD INDUSTRY AGAINST OTHER INDUSTRIES 3 1.2. COMPARISON OF ABX AGAINST INDUSTRY COMPETITION 3 1.3. CONSISTENTLY POSITIVE CASH FLOWS OCCURRED FOR ABX DUE TO: 3 2. SENSITIVITY OF GOLD PRICE CHANGES AND STOCK EFFECTS 4 2.1. 1% CHANGE IN GOLD PRICES AND ITS STOCK AFFECTS 4 2.2. HOW COULD THE FIRM MANAGE ITS GOLD PRICE EXPOSURE WITHOUT THE USE OF FINANCIAL CONTRACTS 4 3. INSTRUMENTS 5 3.1. INSTRUMENT "GOLD FINANCING" 5 3.2. BULLION LOANS 6 3.3. GOLD-INDEXED EUROBOND 7 3.4. FORWARD SALES 8 3.5. OPTIONS AND WARRANTS (COLLAR STRATEGY) 9 3.6. SPOT DEFERRED CONTRACTS 10 4. SPOT DEFERRED CONTRACT 10 1. Reasons of the past performance of American Barrick Corporation When considering the past performance of American Barrick Corporation (ABX) we distinguish two key areas: 1.1. Comparison of the gold industry against other industries * Key possibilities to mitigate risk are diversifying risk, selling it (i.e. hedging) or insuring against it), whereby the gold industry is clearly focused on mining and processing ore, and therefore do not diversify but rather hedge and insure risk * No convenience yield...
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