9
September
Barrick dilutes by $3 billion to buy back gold hedges
9 September 2009 Reuters
Barrick Gold will issue $3 billion in stock to eliminate all of its fixed-price gold hedges and a portion of its floating hedges, taking a $5.6 billion hit to third-quarter earnings, the world's top gold miner said on Tuesday.
For Barrick, which expects gold prices to keep rising, the deal should remove what has been a big drag on its shares, the legacy of the company's past reliance on hedging, a practice it abandoned in 2003.
During times of weak prices, gold miners often sell a portion of their future production to protect, or hedge, against the possibility that prices will fall.
http://www.reuters.com/article/ousivMolt/idUSTRE58767F20090908
