GATA Chairman Murphy to speak at Cambridge Conferences gold show in Calgary

Section:

http://biz.yahoo.com/djus/030924/1743000908_1.html

VANCOUVER (Dow Jones) -- Barrick Gold Corp. prefers to
take advantage of volatility in the gold price to reduce the
size of its hedgebook, rather than use capital to buy its way
out of hedge contracts, president and chief executive Greg
Wilkins said Wednesday.

At the Denver Gold Forum, Wilkins reiterated that the
company's forward selling program, which seeks to protect
revenues from a falling gold price, has worked "extremely well"
-- and still does in a rising gold-price environment.

His presentation was broadcast over the Internet.

Wilkins repeated Barrick's stance that it won't abandon
hedging, but said the company doesn't want "too much"
production pre-sold. It seeks to reduce its hedgebook to
no more than two years' worth of gold production or 20%
of reserves.

At the end of June, the hedgebook stood at 16.1 million
ounces, or about three years of expected future production.

Barrick estimates its output this year will be between 5.4
million and 5.5 million ounces, and the company expects
a decline in 2004 production as it mines material with lower
gold grades.

The gold price will likely trend higher for fundamental
reasons, but the climb will be volatile, not a straight line,
enabling the company to use dips and spikes in the gold
price to improve the average selling price of its hedged
gold, Wilkins noted.

It therefore isn't a good use of shareholders money to buy
back hedge contracts to slim down the hedgebook, he said.
"Over the next 10 years, I'm sure the market is going to give
us the opportunity to take some of those ounces off the
book and make it smaller and more manageable," Wilkins
said.

If gold weakened over 10 years, "that hedgebook might very
well go to zero," he added.

The hedging program allows Barrick to sell gold at the higher
of spot or contract prices, depending on market conditions,
Wilkins said. Late in the second quarter and into the third
quarter, the company has delivered gold into the spot market,
Wilkins said.

He acknowledged that the company has to reconcile spot
market sales with its hedge contracts at some stage, but
noted that the the defined life of the contracts are 10 years
to 15 years, roughly matching the timeframe it takes to
produce gold from deposits.

Wilkins also said Barrick has bought back 8.8 million
shares at last count, under a one-year repurchase program
announced in May.

The company can buy back up to 35 million shares, but is
limited to buying no more than 2% of shares outstanding per
month.

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