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Barrick Sees Its Share Of Hedging Market Declining

http://biz.yahoo.com/djus/021024/1049000622_1.html

VANCOUVER, October 24 (Dow Jones) -- Barrick Gold
Corp. expects its 15 to 20 percent share of the world's
estimated 100-million-ounce gold hedging market will
drop as the company reduces ounces committed
under its hedges, Barrick chief financial officer Jamie
Sokalsky said Thursday.

On a conference call, Sokalsky said liquidity in the
hedging marketplace is down from several years ago,
but that reduction isn't affecting Barrick's ability to do
business with counterparties.

"We still see a reasonably robust market," Sokalsky
said, adding that there is less business going through
the market in general and the company considers this
factor when it does transactions.

Barrick is in the hedging market every second day,
on average, as it rolls over contracts, he said.

The company's forward sales position was 16.9 million
ounces at the end of the third quarter, and it plans to
cut that position to 12 million ounces by the end of 2003.

The company's variable price sales and call option
contracts totalled 2.2 million ounces at quarter-end,
with a target of 1.5 million ounces.

The mark-to-market value of Barrick's gold contracts
was negative $301 million at the end of the quarter, at
a spot gold price of $324 an ounce, but the
mark-to-market value would approach zero, or
breakeven, at a gold price of $307 an ounce, the
company said.

Barrick surprised observers last month by warning
of reduced third-quarter earnings due to operational
problems at several mines. As reported, actual
earnings in the period were $34 million or 6 cents a
share, down from $59 million or 11 cents a share in
third quarter of 2001.

But the fourth quarter is looking "exactly as we had
planned it," with production and costs on track with
the company's estimates, said John Carrington, vice
chairman and chief operating officer.

Barrick's exploration spending in 2002 is expected to
total $100 million, officials said on the call.
Exploration buudgets for 2003 haven't been finalized.