Gold Campaign | GoldBusters | Cyanide |Youth |
Rainforest Information Centre | Lake Cowal Action Alert |
Lake Cowal Story and Photos | Lake Cowal Coalition
Media Releases | Convergence Site | Corroboree Easter 2006

BARRICK GOLD IN THE NEWS 2002-2004
current news

Barrick Gold's Net Falls as Output Drops, Costs Rise
Oct. 26, 2004(Bloomberg) -- Barrick Gold Corp., the world's third- biggest gold producer, said third-quarter profit fell 8.6 percent as declining mine output and higher fuel costs eroded the benefit of a rally in bullion prices.

Net income fell to $32 million, or 6 cents a share, from $34 million, or 7 cents, Toronto-based Barrick said in a statement. Sales fell 8.9 percent to $500 million.

Gold output dropped 17 percent to 1.23 million ounces as the company processed lower-grade ore at mines in Nevada, Peru, Ontario and British Columbia. The cash cost to produce gold rose 22 percent to $205 an ounce, eroding the benefit of sales prices that averaged $395 an ounce, up 8.2 percent.

Higher mining and ``exploration costs means they are earning less than one would hope,'' said Victor Flores, an analyst at HSBC Securities in New York. He has a ``add''rating on the stock and does not own any.

Shares of Barrick rose 3 cents to C$27.57 ($22.50) at 4:05 p.m. on the Toronto Stock Exchange. They have risen 7.7 percent in the past year.

The company expects construction cost at Veladero in Argentina to increase by about 10 percent to 15 percent from $475 million because of higher prices of fuel, concrete and steel, labor and changes to the scope of the project.

Higher Mine Costs

Barrick in July raised the construction cost of the Pascua- Lama mine on the Chile-Argentina border to between $1.4 billion and $1.5 billion, up from $1.18 billion, because of a change in the way ore will be processed to reduce pollution and cut environmental expenses.

``Although the industry has faced significant inflationary pressure, we remain on track to meet our production and total cash-cost guidance for the year,'' Chief Executive Officer Greg Wilkins said in the statement.

Barrick bought 2.2 million barrels (93.5 million gallons) of fuel, or almost half of projected demand in the next three years, at prices that are below current levels, the company said.

``We've got about 93 million gallons of fuel hedged at an average price below $40'' a barrel, Chief Financial Officer Jamie Sokalsky said in an interview. Crude oil surged 83 percent in the past year, reaching a record $55.67 a barrel in New York yesterday.

Production Gain Expected

Barrick plans to produce 4.9 million to 5 million ounces of gold this year at an average cash cost of $205 to $215 an ounce. The company expects production to rise next year, with output totaling between 5.3 million and 5.5 million ounces, Sokalsky said.

Barrick is forecasting production of 6.3 million to 6.5 million in 2006 and 6.8 million to 7 million in 2007, almost matching Newmont Mining Corp., the world's biggest gold producer.

``We're targeting 40 percent growth in production through 2007,'' said Sokalsky.

The company will add a new mine in North America, with the development of the East Archimedes project in Nevada, an old Homestake Mining Co. property, Barrick spokesman Vince Borg said.

Barrick purchased Homestake three years ago. The company won't say how large the Archimedes deposit is. Borg said Barrick expects to mine the property for at least six years. Permitting for the mine will take about a year, Sokalsky said.

``We have a lot of growth in South America,'' Borg said. ``This is a good addition to our North American asset base.''

The company reduced its gold-hedge position by 200,000 ounces in the quarter to 13.7 million ounces, or 16 percent of its reserves.

Barrick's sales in the third quarter of 2003 were $549 million.

AngloGold Ashanti Ltd. is the world's second biggest gold producer by 2003 output.To contact the reporter on this story:
Choy Leng Yeong in Seattle at o clyeong@bloomberg.net

To contact the editor responsible for this story:
Steve Stroth at sstroth@bloomberg.net.
Last Updated: October 26, 2004 16:08 EDT

TORONTO--(BUSINESS WIRE)--Oct. 4, 2004--Barrick Gold Corporation (NYSE:ABX) (TSX:ABX) (LSE:ABX) (PARIS:ABX) (Swiss:ABX) advises that the Tax Court of Peru has decided in favor of Barrick's Peruvian subsidiary in its case with SUNAT, the tax agency. The appeal of the tax assessment was previously announced in January 2003.

Any appeal by SUNAT must be filed within 90 days.

Barrick's shares are traded under the ticker symbol ABX on the Toronto, New York, London and Swiss stock exchanges and the Paris Bourse.

Contacts

Barrick Gold Corporation Investor Contact:
Darren Blasutti
Vice President, Investor Relations
(416) 307-7341

Barrick Gold Corporation Media Contact:
Vincent Borg
Vice President, Corporate Communications
(416) 307-747

The Department of the Interior's Office of Hearings and Appeals (OHA) has granted a Petition For Stay from Western Watersheds Project. The Stay blocks a recent decision for the enormous Squaw Valley and Spanish Ranch Allotments by the Elko Field Office of the Bureau of Land Management (BLM).

The permittees grazing on these public land allotments are Barrick Goldstrike, a foreign-owned mining company, and Ellison Ranches. The vast allotments encompass several hundred thousand acres in the heart of the sagebrush sea in western Elko County, Nevada. These lands provide essential habitat for sage grouse, pygmy rabbit, a wealth of migratory birds, antelope, mule deer and many other important wildlife species including threatened Lahontan cutthroat and redband trout.

OHA Administrative Law Judge James Heffernan's decision blocks a convoluted grazing scheme that relied on construction of over one hundred miles of new fence, mostly at taxpayer's expense. The Stay also prevents the implementation of BLM's proposed herbiciding of large areas of sagebrush to increase forage for Barrick Goldstrike's cattle.

"This court action will prevent a truly bad decision from going into effect," said Katie Fite, WWP's Director of Biodiversity, "BLM never even considered significant reductions in livestock numbers despite its own overwhelming documentation of the harms caused by current livestock grazing to streams, springs and the sagebrush uplands. Fortunately, Judge Heffernan recognized that irreparable harm would occur to the environment if the massive amount of fencing and herbiciding were to go ahead."

"Ironically, part of this BLM decision was supposed mitigation for the massive environmental damage and aquifer depletion caused by Barrick Goldstrike's cyanide heap leach mining, but instead of gaining meaningful protections for public lands, BLM chose to destroy and further fragment sagebrush habitats for the sole benefit of Barrick Goldstrike's cattle" said Jon Marvel, executive director of Western Watersheds Project.

Gold Firm Libelled on Web Sites, Court Rules: www.bothends.org: mfi information centre: dossiers (select english).

The Court of Appeal increased the trial judge's award by quintupling the general damages award to $75,000 and adding $50,000 in punitive damages. The Court also permanently restrained the defendant from disseminating, posting on the Internet or publishing in any manner whatsoever any defamatory statements concerning Barrick. Barrick was also awarded its costs for the appeal.

The Court held that "Internet defamation is distinguished from its less pervasive cousins, in terms of its potential to damage the reputation of individuals and corporationsÝespecially its interactive nature, its potential for being taken at face value, and its absolute and immediate worldwide ubiquity and accessibility."

Read the decision at: http://www.ontariocourts.on.ca/decisions/2004/june/barrickC39837.htm

The class-action lawsuit, in which gold investors Greg McKenzie and A.J. Miller are the lead plaintiffs, will attempt to quantify the financial harm done by Barrick and Morgan Chase to gold investors and devise a remedy for their restitution.

"We expect to obtain compensation for all gold owners, not only for their losses from their gold investments but also for the profits they should have realized," Blanchard CEO Donald W. Doyle Jr. said in an interview with the Gold Anti-Trust Action Committee.

GATA consultant Reginald H. Howe brought a similar federal lawsuit in Boston in 2000. It was dismissed on jurisdictional grounds in 2002. Since then GATA has documented and publicized evidence of manipulation of the gold market by Barrick, Morgan Chase, other bullion banks, and the U.S. government.

"The exact number of gold owners who are members of the class is unknown at this time and can be determined only through appropriate discovery and expert testimony," Doyle told GATA. "But we allege, on information and belief, that the members of the class owned, during the period at issue, about 96.5 million ounces of gold having a market value of $38.58 billion at $400 per ounce. Once a judgment is obtained and the amount of damages suffered by the class members is determined, those damages will automatically be tripled under the mandatory provisions of the federal anti-trust laws.

"In 1983 Barrick Gold Corp. was a start-up company with a single mine in Canada and a founder with no experience in the gold business," Doyle said. "By 2001 Barrick had amassed off-balance-sheet assets that were worth more than the market capitalization of the next five biggest gold-mining companies in the world combined. Barrick made $2.3 billion on its short sales of gold and made a profit on those short sales for 62 consecutive quarters. A short sale is inherently a high-risk speculation. How many true speculations have ever been profitable for 62 consecutive quarters?"

Blanchard's original lawsuit charges essentially that Morgan Chase provided Barrick with so much borrowed gold -- presumably obtained from central banks -- on such favorable terms that Barrick could overwhelm the market and move prices up or down at will and not have to repay the borrowed gold for many years if at all. In some years, Blanchard maintains, Barrick was able to supply to the market more gold than was supplied by all the bullion banks combined.

In an attempt to have Blanchard's lawsuit dismissed, Barrick, according to GATA, seemed to acknowledge the plaintiff's premises. Barrick submitted a motion arguing that in borrowing gold and selling it into the market, the company was acting as the agent of central banks and carrying out their policies in the gold market and thus should share their immunity from lawsuits.

U.S. District Judge Helen Berrigan rejected Barrick's motion and sent the case on for discovery and trial.

"While the price of gold fell by more than 25 percent," Doyle said, "Barrick was able to increase its annual operating cash flow by more than 400 percent. Barrick became the dominant gold mining company in the world through acquisitions made with the profits from its short sales of gold. By suppressing and depressing gold prices, Barrick forced its competitors to sell gold assets and companies at fire-sale prices.

"The measures that Blanchard has taken have already been good for the gold industry and our clients. Since we began discussions with Barrick in this lawsuit, the company has reduced its hedging position by 10 million ounces, adding gold demand and subtracting gold supply. On December 2, 2003, Barrick's president and chief operating officer announced that Barrick had given up hedging for good. By consenting to the termination of its short sales of gold -- assuming that Barrick honors its commitment -- the company took a major remedial step sought by Blanchard's original complaint.

"I believe that the class action will be successful in recovering damages and putting a stop to practices that have suppressed and depressed the price of gold and all tangible assets," Doyle concluded.

Blanchard's Internet site with information about its litigation is: http://www.savegold.org/.

RENO (Mineweb.com) -- Even as Barrick President and CEO Greg Wilkins was extolling his company's "A"-rated balance sheet and its ability to self-finance its projects to a Toronto mining conference on Thursday, Moody's Investors Service said that it is reviewing the company's debt ratings for possible downgrade.

Moody's said its review "is prompted by the fact that the company is embarking on a major mining development program to add production and to lower costs from a platform that currently has higher costs and lower production than was historically the case." Barrick's plans to develop five new mines while reducing its hedging position have prompted lively discussion among investors and analysts.

In his presentation to the 10th Annual Merrill Lynch Mining Conference on Thursday, Wilkins said the strong development project pipeline will result in the lowest total cash costs for Barrick of all major gold producers. Barrick is currently building four open-pit mines, Veladero in the Frontera District of Argentina, Lagunas Norte in Alto Chicama, Peru, Cowal, Australia, and Tulawaka in Tanzania. The combined capex for construction of the four mines totals more than $1.1 billion. Total combined cash cost for the new mines is expected to average $160-170 per ounce, according to Wilkins. Future gold/silver mega-mine Pascua-Lama, also in the Frontera District of Argentina and Chile, has been given the technical go-ahead. However, analysts have expressed concern about Barrick's ability to finance the massive project. Capital costs alone are estimated at US$1.5 billion for Pascua-Lama. Its average total cash cost is estimated at $130-140 per ounce. Meanwhile, Barrick already has 12 operating mines in seven nations, according to Wilkins.

However, Wilkins told analysts on Thursday that Barrick "is capable of self-financing our developments without equity dilution." The total combined capex of all current and future projects now approved is $2.6 billion, according to Vince Borg, Barrick's Vice President of Corporate Communications. However, Moody's said that Barrick reported revenues of $1.9 billion in 2003.

Meanwhile, the company has also adopted a no-hedge policy, which has already exceeded its commitment to reduce hedging by 1.5 million ounces this year.
Barrick's reserves are currently estimated at 86 million proven and probable ounces of gold with measured and indicated resources of 25 million ounces. Wilkins said more than 38 million ounces of reserves are now in development. Unhedged reserves increased 61 percent over the past four years, he added.

Wilkins said Barrick's exploration strategy involves more than 95 projects in nine nations including 2 million ounces of greenfield gold deposits. Six countries, Peru, Chile, Argentina, the US, Tanzania, and Australia, have been designated as high priority exploration targets, he added.

In its review, which usually takes about two weeks, Moody's declared "it will consider the risks inherent in completing all five mines on time and on budget, the impact of the new mines on Barrick's overall cost position, and the impact of the development on the company's overall financial condition."

"The review will also consider Barrick's changing geographic risk profile, as well as the possibility that it will finance a greater portion of its mines at the project level," Moody's said. "Finally, in light of the company's announcement that it is no longer adding to its gold hedge position, the review will consider the impact on Barrick's revenues of various gold price scenarios."

In an interview on Thursday with Mineweb, Barrick's Vince Borg said the company is not surprised that Moody's has placed Barrick's Senior Unsecured Debt Ratings under review. Borg noted that Barrick is the only major gold mining company with an overall "A" bond rating. Even if that rating were downgraded to a "A-", it will still be stronger than other companies, he added.

In an unrelated matter, Borg said Barrick is still considering bidding for a tender for the rights to tap the huge Siberian gold deposit Sukhoi Log although Russia has delayed the auction until 2005. Russian Natural Resources Minister Yuri Trutnev told Reuters that he favors an open cash auction for Sukhoi Log, which has been added into the nation's 2005 privatization plan. However, it still has not been settled as to whether a 25 percent restriction on foreign ownership will be implemented. It is estimated that it could cost as much as $1 billion to develop the deposit.

The Department of the Interior's Office of Hearings and Appeals (OHA) has granted a Petition For Stay from Western Watersheds Project. The Stay blocks a recent decision for the enormous Squaw Valley and Spanish Ranch Allotments by the Elko Field Office of the Bureau of Land Management (BLM).

The permittees grazing on these public land allotments are Barrick Goldstrike, a foreign-owned mining company, and Ellison Ranches. The vast allotments encompass several hundred thousand acres in the heart of the sagebrush sea in western Elko County, Nevada. These lands provide essential habitat for sage grouse, pygmy rabbit, a wealth of migratory birds, antelope, mule deer and many other important wildlife species including threatened Lahontan cutthroat and redband trout.

OHA Administrative Law Judge James Heffernan's decision blocks a convoluted grazing scheme that relied on construction of over one hundred miles of new fence, mostly at taxpayer's expense. The Stay also prevents the implementation of BLM's proposed herbiciding of large areas of sagebrush to increase forage for Barrick Goldstrike's cattle.

"This court action will prevent a truly bad decision from going into effect," said Katie Fite, WWP's Director of Biodiversity, "BLM never even considered significant reductions in livestock numbers despite its own overwhelming documentation of the harms caused by current livestock grazing to streams, springs and the sagebrush uplands. Fortunately, Judge Heffernan recognized that irreparable harm would occur to the environment if the massive amount of fencing and herbiciding were to go ahead."

"Ironically, part of this BLM decision was supposed mitigation for the massive environmental damage and aquifer depletion caused by Barrick Goldstrike's cyanide heap leach mining, but instead of gaining meaningful protections for public lands, BLM chose to destroy and further fragment sagebrush habitats for the sole benefit of Barrick Goldstrike's cattle" said Jon Marvel, executive director of Western Watersheds Project.

Republican U.S. Senate candidate Pete Coors owns a stake in a Canadian gold-mining company that U.S. environmental regulators rank as one of the largest polluters in the country.

Coors' investment in Toronto-based Barrick Gold Corp. - valued at between $50,000 and $115,000 - links him to a company that consistently appears near the top of the U.S. Environmental Protection Agency's toxic-release index.

Last week, environmental issues jumped to the forefront of Coors' hotly contested Senate race against Democratic state Attorney General Ken Salazar.

An out-of-state group began running television ads attacking Salazar's handling of the cleanup of a cyanide spill at the Summitville gold mine.

Salazar's camp and Stuart Sanderson, president of the Colorado Mining Association, called the ad unfair. Coors refused to ask the group - Americans for Job Security of Alexandria, Va. - to pull the ad off the air.

Now, Coors' ownership in Barrick Gold, which successfully sued the EPA to change how toxic waste is calculated, raises another environmental issue.

"Companies like Barrick that have sued to hide their toxic releases from the public are not an environmentally ethical investment," said Alan Septoff, research director for Earthwatch, a Washington, D.C.-based group that monitors the mining industry.

Coors spokeswoman Cinamon Watson said the candidate did not ask Americans for Job Security to begin running the ads, and she defended Coors' stock ownership.

"Barrick is one of a number of investments that Pete has," Watson said. "As to the environment, Pete supports a fair and balanced approach based on sound science."

In this case, the mining association's Sanderson supported Coors.

"If indeed he owns stock in Barrick Gold, he owns stock in a company that has shown its leadership nationally in dedication to environmental protection," Sanderson said.

Barrick Gold stock is one of more than 60 investments that Coors listed in a financial disclosure he submitted to the secretary of the U.S. Senate in May.

Barrick Gold acquired the Goldstrike Mine in Nevada in 1994 for $9,000, under an 1872 law that lets companies stake a claim for $5 an acre. The 1,800-acre claim included an estimated $10 billion worth of gold.

The law remains controversial.

Roger Flynn, managing lawyer for the Western Mining Action Project in Boulder, said Coors is profiting from a company that acquired its large Nevada mine at taxpayers' expense.

"That's a pretty darn good investment at the expense of taxpayers," Flynn said. "If Coors is a friend of taxpayers like he says in his ads, why doesn't he tell the company to give back $10 billion?"

Barrick Gold ranks near the top of the EPA's toxic-release index despite successfully suing the EPA to change the way those substances are reported by mining companies.

In 2003, a federal judge ruled that Barrick Gold and other mining companies were not required to count the material they extract from the ground if it is not processed to extract gold.

Barrick Gold's toxic releases dropped from first place nationally with 426.9 million pounds in 1998 to fifth with 79.4 million pounds in 2002, the most recent year that data are available. The toxic chemicals released include arsenic, cyanide, lead and mercury.

Coors also has other ties with Barrick Gold. In 2003, Adolph Coors Co. added Barrick Gold's former chief executive, Randall Oliphant, to its board of directors.

Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com .

Gold Firm Libelled on Web Sites, Court Rules
By Tracey Tyler
Toronto Star
Saturday, June 5, 2004

In a decision legal experts say will "scare the hell" out of Internet users and set back free speech, the Ontario Court of Appeal has ordered a homeless Vancouver man to pay $125,000 in damages for libelling a gold mining corporation on several Web sites. The court also issued a permanent injunction to stop Jorge Lopehandia from defaming the company in cyberspace.

When Barrick Gold Corp. sued Lopehandia for libel last year, the trial judge, Madam Justice Katherine Swinton, concluded his Internet postings amounted to an "emotional, often incoherent" diatribe that no reasonable person would take seriously. She awarded the company a nominal $15,000 for injury to its reputation.

But the appeal court set aside her decision yesterday. In a 2-1 ruling, the court called Lopehandia's campaign of "cyber libel" malicious, high-handed, unremitting,
tenacious, vicious, spiteful, "wide ranging in substance, and worldwide in scope."

Lopehandia claims that he and three others nominally owned a Chilean mine site acquired by Barrick. In messages posted on various cyber bulletin boards, he
accuses the company of, among other things, fraud, money laundering, and pursuing organized crimes against humanity. "Barrick is DEVIL killer," one line said.

Libelling someone on the Internet is different than defaming him in other media, such as newspapers, the court said yesterday. Lopehandia's use of the Internet made his "blizzard" of messages potentially more damaging -- and more believable -- because of the speed, scope, and blunt anonymous nature of statements on the World Wide Web, the court said.

Lopehandia did not have a lawyer representing him at the trial or when the case came before the Court of Appeal.

Mr. Justice Robert Blair, who wrote yesterday's decision, said Lopehandia's writing style might not be taken seriously in more traditional media, such as newspapers, but there's nothing to suggest it would be laughed off on the Internet, where, as one expert put it "anything goes."

The majority increased general damages to $75,000 and ordered Lopehandia to pay $50,000 in punitive damages as punishment for conduct Blair described as falling into the special category of being so outrageous that it offends the court's sense of decency. The use of the Internet helped to push it into that league, he said.

Reached yesterday in North Vancouver, Lopehandia's son, Jordan, 23, said his father is living in a downtown hostel and has no access to a phone. He believes that people are out to get him, his son said.

Libel law experts found yesterday's ruling deeply troubling.

"This is a decision which will send a chill to users of the Internet," said Toronto lawyer and libel law expert Bert Bruser, who represents the Star. "The Court of Appeal has determined that somehow or other, chatter on the Internet is more deadly than other forms of libel and they did this, it seems to me, without any evidence."

Libel law expert Brian Rogers agreed. Rogers said he too found it disturbing that "some very strong and pervasive" findings were made about the Internet without hearing from those who might defend how it was used in this case.

Blanchard & Co., the New Orleans coin and bullion dealer, announced today that it has defeated a motion by Barrick Gold to add about 20 bullion banks and 75 gold producers as defendants in Blanchard’s gold price-fixing lawsuit in federal court in New Orleans.

In a statement to its employees, Blanchard said Barrick had based its motion on a claim that its gold hedging program is similar to programs used by other mining companies. But, Blanchard added, Barrick has long claimed in filings with both the court and the U.S. Securities and Exchange Commission that its hedging program is UNIQUE.

That is, it seems that, to try to delay the lawsuit and its evidence-discovery process by adding dozens of defendants, Barrick has just changed its story completely.

Denying Barrick’s motion, the court didn’t buy the change of stories.

Barrick and its co-defendant and bullion bank, J.P. Morgan Chase & Co., are, GATA has long maintained, the intermediaries through which the U.S. Treasury Department and Federal Reserve have been intervening surreptitiously in the gold market. The U.S. government is entitled by law to sell and buy gold but, GATA has maintained, only to achieve ordinary purchases and sales, not to rig the market, and only in the open, not surreptitiously so that only favored associates of the government, like Barrick and Morgan Chase, can profit by exclusive knowledge of government policy.

Those were the points of GATA consultant Reg Howe’s lawsuit against Morgan Chase, the Treasury Department, the Fed, and others in federal court in Boston several years ago.

The Blanchard lawsuit pursues the same points with a much-narrowed list of defendants, which is why the case is so important.
Blanchard’s statement is appended.

CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.
* * *
STATEMENT TO BLANCHARD & CO. EMPLOYEES FROM DONALD W. DOYLE JR., CEO

We just received a copy of the court’s order and reasons denying Barrick’s motion to join, as defendants, approximately 20 bullion banks and 75 gold producers. The court said that, without production of the documents requested by Blanchard, it was impossible to determine the status of the absent parties.

According to the court, a dispositive issue in this case is whether or not Barrick’s hedging program is unique. Blanchard says the program IS unique; Barrick claims that it is NOT unique.

The court has placed Barrick on a very slippery slope. Not only is the company now open to its worst nightmare—discovery that will provide even more proof of manipulation and monopolization—but it also finds itself in the unenviable position of claiming that its hedging program is NOT unique even though the company has repeatedly stated the OPPOSITE in filings with the federal district court and in filings with the U.S. Securities and Exchange Commission.

Just two examples:

“Barrick admits, on information and belief, that no other gold producer has available to it the combination of margin-free hedging, 10-15-year terms, and flexible delivery dates that are available to Barrick.” (Answer of defendant Barrick Gold Corp. to plaintiffs’ third supplemental and amended complaint, October 7, 2003, Paragraph 35.)

“The terms of our gold sales contracts provide flexibility and benefits that we believe are unique to us and unavailable to any other gold producer.” (Barrick annual report for 2002, Page 55, incorporated in Barrick’s Form 40-F filing with the U.S. Securities and Exchange Commission in 2003.)

The citations followed an investigation into the death of Ernie Spalding, 38, who was burned by crushed ore and fell from a work level at the plant to the concrete floor below on Nov. 19.

The roaster facility includes two identical roasters that heat carbonaceous ore to 1,000 degrees Fahrenheit to burn off sulfides and impurities.

The hot ore, called calcine, then flows to quench tanks at a roaster through two discharge pipes, called A-leg and B-leg, according to MSHA.

Spalding was killed after he entered a work area where a gasket was being replaced in a discharge pipeline that transferred the hot calcine dust to a quench tank, when the dust was unexpectedly released.

Spalding was alone in the area. Other workers had left to get parts, according to MSHA's investigation.

"The accident occurred because the procedures being used to perform this repair work at the discharge pipeline were inadequate. The roaster had not been emptied of hot calcine dust before the maintenance work was performed," MSHA writes.

"A task analysis identifying all hazards associated with this maintenance task was not conducted," the agency also states, adding that the workers weren't trained in safe procedures for this type of work.

The roaster was shut down until Dec. 2.

Spalding had more than eight years of experience working on roasters, including three years at Goldstrike, and he had been a trainer for nearly a month before the accident, the report states.

One citation against Barrick was over the lack of a mechanical device or other means to prevent injuries created by sliding materials.

"Failure to provide means of controlling the hot calcine material when the 'B' discharge line was disconnected at the slide gate constitutes more than ordinary negligence and is an unwarrantable failure to comply with a mandatory standard," MSHA states.

This citation was terminated on Jan. 13 when the company established a written safe-job procedure and miners were instructed in procedures for working on roaster discharge legs.

The second citation was over the lack of protective clothing and equipment for workers in an area where there could be hot calcine material.

The citation was terminated Jan. 13 when Barrick wrote a safe procedure that includes protective clothing when maintenance is performed on the roaster discharge legs, MSHA wrote.

Spalding's death was the second of two mining fatalities in the state in 2003. James Tanner, 40, was killed at the Eagle-Picher plant near Lovelock Aug. 9 in a fall from the roof, where he was working.

See also http://home.rmci.net/jscoombs/gibbons/votes_against_the_environment.htm

VANCOUVER, British Columbia—Barrick Gold Corp. said Friday it was prepared to lose out on higher gold prices on a third of its output this year as it lives up to a promise to wipe out its bulky hedge book.

The Toronto-based miner, the world’s third-largest bullion producer, owns the gold industry’s biggest hedge book, a thick pile of contracts it entered into over many years to lock in prices for its as yet unmined gold.

Barrick scored when the gold price was weak but the metal’s 65 percent gain in the past three years to over $400 an ounce has overtaken the price it has pre-sold much of 15.5 million ounces of its production.

Hedging has become unpopular with investors, who want to see the full benefit of today’s high gold prices.

Chief executive Greg Wilkins said on Friday the company would deliver at least 1.5 million ounces out of anticipated production of 4.9 million to 5.0 million ounces in 2004 into hedge contracts, even if it means losing money on sales.

“We will accept the opportunity cost of managing the book down,” Wilkins said in a conference call with analysts to discuss Barrick’s fourth quarter and 2003 results.

A total of 1.5 million ounces “is a minimum amount and could perhaps be higher, depending on what happens in the gold market,” said Wilkins, who was appointed Barrick’s head a year ago after his predecessor was sacked.

Asked if Barrick, whose hedge contracts do not have to be closed out this year, would sell its gold into lower-priced contracts even if bullion jumped to $500, Wilkins said:

“We have set a target to manage the book down. But we will then be benefiting substantially from the higher gold prices” on unhedged production. About 82 percent of Barrick’s gold reserves in the ground are not hedged.

Wilkins said Barrick had already reduced its hedge book by 300,000 ounces since Jan. 1, selling the gold at prices about $50 an ounce below the spot market price.

Barrick reported fourth quarter earnings of $77 million, or 14 cents a share, late on Thursday, up from the $54 million or 10 cents per share in the same period a year ago.
But Wilkins said if one-off items such as a derivative and tax gain were stripped out of earnings, the per share figure would have been 8 cents. This was bang-on analysts’ expectations as polled by Reuters Research.

Barrick said its gold reserves, the amount of gold in the ground it can mine profitably, dropped to 86 million ounces at the end of 2003 calculated at a price of $325 per ounce.

This compares with 86.9 million ounces a year ago, when Barrick calculated reserves using a $300 price. At the less economic price of $300 an ounce, current reserves would be 82 million ounces.

Gold miners update their reserve holdings once a year, adding ounces acquired through exploration or acquisition, and subtracting those mined out.

Barrick said its cash cost to produce an ounce of gold was $199 in the December quarter.

Barrick reported fourth quarter production figures last month. The firm, which has gold mines on five continents, said then it had produced 1.3 million ounces of gold in the three months, for a total of 5.51 million ounces in 2003.

In the same release, Barrick said it had reduced its hedge book by 600,000 ounces to 15.5 million ounces.

The firm repeated its expectation to produce between 4.9 million and 5 million ounces of gold this year at a cash cost of between $205 and $215 an ounce.

Citigroup defamation suit to go ahead
From Financial Times, London
By Ken Warn in Toronto Published: February 4 2004 0:36

Veteran Canadian businessman Peter Munk and two property companies he heads have won the right to pursue a C$40m (US$30m) defamation and negligence suit in the Ontario courts against Citigroup and one of its analysts.

The ruling is a setback for Citigroup, which had argued that Ontario did not have jurisdiction over the claim. It comes as companies worldwide are taking an increasingly aggressive stance against what they allege to be unfair comment from analysts.

Last month a Paris court ruled that Morgan Stanley had shown "gross misconduct" by publishing misleading and inaccurate research on luxury goods group MoŒt Hennessy Louis Vuitton.
This suit dates back to an August 2002 conference call by Trizec Properties, a US commercial real estate investment trust, or Reit, controlled by Mr Munk.

During the call Jonathan Litt, Citigroup real estate analyst, attacked Mr Munk's record on corporate governance.

In a note to investors the same day, he said he would forward his research on the company to US regulators and to Eliot Spitzer, the New York State attorney-general, who was then heading an investigation into equities research abuses on Wall Street.

Mr Munk alleges that these actions damaged his reputation, drove down Trizec's share price and led to financial losses.

The suit alleges that the "defamatory statements and imputations had an immediate and dramatic negative impact on Trizec Properties' stock price," driving it down by almost 17 per cent.

The suit is filed on behalf of Mr Munk, listed Canadian holding company Trizec Canada, and Trizec Properties.

It names Citigroup Global Markets - the legal name of its broker-dealer - Citigroup Global Markets Canada, and Mr Litt.

"This decision was procedural and nothing more," a Citigroup spokesman said on Tuesday. Citigroup has said in the past that Trizec's claims are "without merit".

However, an Ontario Superior Court judge has ruled against Citigroup's lawyers.

Justice M.A. Sanderson said in her ruling: "I am of the view that this Court should assume jurisdiction, given the interests of all the plaintiffs in protecting their reputations in Ontario, the publication of allegedly defamatory statements in Ontario, the unfairness to the plaintiffs in not assuming jurisdiction . . . and Citigroup Canada and Citigroup Global's business presence in Ontario."

Mr Munk founded Trizec's predecessor in 1987. He is also the chairman and co-founder of Barrick Gold, Canada's biggest gold producer.

Mine fixing leak from water pond
By Tim Velder, Northern Hills Bureau (Rapid City, South Dakota)
January 10, 2004

LEAD - Subzero temperatures and high winds broke a hole in a containment lining Monday at a defunct gold mine near Terry Peak, causing water stored there to leak into a nearby creek.

The water, from a storm water pond at LAC Minerals Richmond Hill Mine, is still leaking through the lining, officials from the South Dakota Department of Environment and Natural Resources said Thursday.

DENR natural resources engineering director Mike Cepak said the water contains trace amounts of selenium. The pond captures and holds rain and snow runoff from the mine site, which contains capped heap leach pads.

"The water quality in the pond is not that bad," Cepak said. "It is no public health issue for sure. It's just something we need to get fixed."

Barrick Gold Corp. spokesman Vince Borg said Thursday that crews at the mine site discovered the leak Tuesday during a weekly check of the storm water pond.

Borg said a crew from Utah would arrive today to begin its repair work, a job that would take several days depending on the weather. The pond contains about 38 million gallons of water now and is about half full, Borg said. Crews will transfer water from that pond into another pond until the ruptured liner is exposed.

Cepak said a stream of water is running out of the pond and into Rubicon Gulch at about 35 gallons per minute. The stream eventually flows over Bridal Veil Falls in Spearfish Canyon and into Spearfish Creek.

DENR sampled the water at the base of the pond and determined that it has about 38 parts per billion of selenium. Borg said LAC tests showed selenium levels of 32 parts per billion.

Selenium is an essential element to human and animal nutrition in minute concentrations, but prolonged ingestion of higher concentrations over a long period of time could be toxic. Toxic levels of selenium can cause liver damage in humans.

Cepak said the minimum standard for drinking water standards is 50 parts per billion, which means the leaking water is under that limit. The selenium levels are too high, however, for DENR's daily level for groundwater, which is 20 parts per billion.

DENR Mining Program administrator Dave Townshend said the leaking water is diluted by other water as it flows through the gulch. "By the time it gets to Spearfish Creek, there shouldn't be any problem with compliance," Townshend said. "It is a relatively minor problem."

He said this incident is "not in the league" of acid rock drainage or cyanide spills that kill fish or threaten groundwater supplies.

Cepak said LAC officials notified DENR of the leak Tuesday. He said the extreme cold temperatures on Monday, which dipped to about 20 degrees below zero, caused the hard plastic liner to crack under the pressure of the ice. Gusty winds also buffeted the surface, which tore the liner.

LAC's liner is 15 years old and has been exposed to the weather, which might be a contributing factor to its failure, Cepak said.

DENR took water samples Tuesday and Thursday and plans more sampling today. Other samples are being collected from a nearby underground well. DENR will station an inspector at the site to monitor the repair job.

LAC Minerals, a subsidiary of Barrick Gold Corp., manages the mine property. LAC personnel treat water there in the summer and monitor the conditions of the mine. If conditions warrant, LAC crews could treat water in the winter months as well.

LAC Minerals USA, formerly known as St. Joe Gold Corp., started mining at the Richmond Hill site in 1988. It operated an open pit, heap-leach surface mine until 1995. In 1994, LAC posted a $10 million reclamation surety to remedy acid water drainage at the site. LAC covered its waste rock facility in 1995 to curb acid water drainage, and covered its heap-leaching system in 1997.

LAC stopped treating water at the site in 2001 but resumed seasonal water treatment in 2002. DENR officials said water treatment and reclamation activities at the site would continue.

Barrick Gold chairman Peter Munk in 2000 on hedging: "It's not only rock solid, it's an absolutely primitive undertaking of the simplest, most understandable format."
Mr. Munk last month: "The commitment to hedging is gone."

This week, Barrick officially pushed its hedging program down the mine shaft. Yesterday, at a mining conference in London, chief executive officer Greg Wilkins found himself in the unusual position of defending a corporate policy that had helped the company become one of the largest and financially strongest players in the industry.

Barrick's hedge book had been active for about 20 years, had generated about $2-billion (U.S.) in profit that would have otherwise been denied, and was touted as a sure-fire way to make a buck regardless of the gold price. If that weren't enough, the forward sales contracts were highly flexible. This allowed delivery to be deferred -- for years, if the company chose -- so that immediate production could be sold at the higher spot price. To top it off, Barrick, the anti-Christ as far the unhedged miners were concerned, argued forcibly, although not always convincingly, that hedging did not put downward pressure on prices. Au contraire, Mr. Munk would say; the practice "assisted in the evolution of a healthy gold price."

Why did Barrick lose religion so quickly?

First, an example in gold hedging. An investor, say a bank, realizes it can borrow an ounce of gold from a central bank at the bargain rate of 1 per cent a year. Suppose a government bond pays 4 per cent. So the get-rich-slowly plan is to borrow the gold, sell it in the spot market, say at $400, and invest the proceeds. In five years, the investor would have made his 4 per cent, less the 1 per cent he paid to borrow the gold, for net proceeds of $460. At that point, the investor can buy an ounce of gold and hand it back to the central bank. The problem, of course, is that the investor doesn't have a clue what the gold price will be in five years. If it's less than $460, he's in fine shape. If it's more, he's out of luck.

This is where Barrick would enter the scene. It might agree to sell gold to the investor in five years for $450. The investor would have enough money to pay for it, plus make a small profit. Barrick, meanwhile, would sell the gold short in the futures market, knowing it had a buyer at $450 down the road. At that point, everyone would be smiling: Barrick was protected from the low spot price and the investor would be protected from a high spot price when it came time to settle the trade. For Barrick, rising gold prices were the risk. If the price were $500 in five years, it would receive $50 less than it could get in the spot market. This is not an outright loss, per se; it's an opportunity cost. And it might not even be that if Barrick exercised its option to defer the deal for a few years in the hope the spot price would fall.

Given that the system worked so beautifully for so long, Barrick has some explaining to do, and Mr. Wilkins has been doing that. "The problem," he says, "is with financial derivatives," that is investors either don't understand them or, if they do, worry they have the potential to cause a lot of damage. Indeed, stories of about the implosion of Enron and, a few years ago, Long-Term Capital Management, both liberal users of derivatives, have raised anxiety levels among investors.
The unravelling of the hedge book of two lesser gold companies, Cambior and Ashanti Goldfields, didn't help. Neither did Warren Buffett's warning this year that derivatives are "financial weapons of mass destruction."

Okay, but Barrick has never been the victim of a hedge-book disaster and has said one is unlikely because it had hedging down to a fine art. Investors' alleged wariness about derivatives doesn't fully explain why Barrick has substantially underperformed its peer group in the past year or so.

There is the "grassy knoll" theory, which says a nervous creditor read Barrick the riot act. Why would it do that? Because if Barrick were forced to close out all its hedges -- it has 16.1 million ounces sold forward -- it would cost the company $1.2-billion. Worse, every $1 rise in the price of gold puts Barrick another $16.1-million into the hole. (Gold has gone up about $30 an ounce since mid-October.) But Mr. Wilkins says this is nonsense. Creditors are not worried and the company would have absolutely no problem meeting its hedge contract obligations.

So let's ask the question again: What went wrong? The answer, simply, is rising gold prices. Mr. Wilkins will admit the tipping point came with the "flip over in the price of gold. Investors want [full exposure] to the run on gold prices." Barrick, because of its hedge book, can't deliver full exposure. In other words, Barrick was right when it said it could make money at any gold price. That, however, didn't mean investors would stick around when Newmont and other big unhedged mining companies were realizing full value from rising prices, and more. Gold shares are discounting prices well in excess of the current $403. Not Barrick's.

The irony is that Barrick, the industry pariah because of its hedging strategy, is now the industry's best friend. When Barrick hinted it would halt forward sales and wind down its hedge book, gold prices took off. When the biggest short seller of them all called it quits, gold bugs knew their optimism was warranted. Poor Barrick. It might take it years to close and bury the hedge book, and that will put a drag on its shares.

ereguly@globeandmail.ca

Now Barrick hedge will be dropped - http://ls.shapebyforce.com/sbf/350

MineWeb's report on Barrick's reversal on hedging:
By: Ken Gooding
Posted: 2003/11/24 Mon 05:30 ZE2  | © Mineweb 1997-2004

12:24a ET Saturday, November 22, 2003

Dear Friend of GATA and Gold:

Something really strange is going on with Barrick Gold.


Thursday at a financial conference in London, Barrick Chairman Peter Munk made what MineWeb called a “spirited” defense of the company’s policy of selling so much of its gold in advance of its production. But today Munk told news reporters at the same conference that Barrick won’t be doing any more hedging.

Why make such a gold-bullish declaration on the eve of contract expirations on the Comex, where the shorts with whom Barrick long has been allied are struggling desperately to keep gold below $400?

And why (as MineWeb’s Ken Gooding reported) did Barrick President Greg Wilkins have to excuse himself from the London conference to rush off to an urgent meeting in New Orleans?

All this has prompted a lot of speculation: That Barrick’s bankers have pulled the plug on the company because the gold price has increased the debt of Barrick’s hedge book too much; that Barrick heard something Thursday evening about gold’s future and wanted to reposition itself quickly; and that Barrick has realized that its share price is doomed unless it changes its image in the market, among other possibilities.

As for Wilkins’ urgent trip to New Orleans, it’s not Mardi Gras time. Could it have something to do with the price-fixing lawsuit brought against Barrick and Morgan Chase by Blanchard & Co. in federal court there, the lawsuit that has just been allowed to enter discovery and deposition?

It’s all just speculation, but it’s hard to imagine that Barrick would have ARRANGED things to make itself look so scatter-brained. This can be only good for our side.

Meanwhile, you may get a laugh out of MineWeb’s recent interview with South African gold analyst Nick Goodwin (appended in part), who has suddenly noticed that someone is capping the gold price, even if he doesn’t seem to want to know who it is. A trader at Mitsubishi International Corp. quoted in a Reuters story today (also appended) also notes that the gold price is being “capped.”

The word is out; GATA isn’t the only one that has noticed.

One more thing: Don’t miss Jim Sinclair’s commentaries tonight, particularly his “Note to the Community,” here: http://www.jsmineset.com/home.asp

CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.

The article refers to a campaign started by 2 ex-employees of Barrick Gold denouncing the danger of water pollution and damage to the environment of San Juan province in Argentina if the environmental impact assessment that would allow the company to begin operations is approved.

Marcos Guevara and Favio Barragan (the 2 ex-employees) are taking Barrick to the Local Government's Mining Authority. The have provided the Authority with precise information on location of sites where the company have buried mining waste, which constitutes a breach of the environmental law of the province.

It seems that in a previous occasion Barrick Gold was ordered to stop the entrance of equipment and machinery to another project in the same region ("Pascual Lima" project).

Their accusations and demands come at a critical time as San Juan will hold elections for governor in 10 days.

Guevara and Barragan are attacking the 2 main candidates as they have ignored during their campaigns the demands to stop Barrick. Guevara and Barragan are collecting signatures in the streets to pressure the government and the candidates. The local government is keen to allow Barrick to operate in the region arguing that the project will create jobs. However, Guevara and Barragan explain in the leaflets they distribute in the streets that the number of jobs that the government is attributing to the project is exaggerated and that most of the workers will be foreigners anyway.Guevara says that he is aware of the difficulties and risks involved in his campaign to try to stop a powerful company such as Barrick Gold. He says that he has received threats.

Finally, Guevara ratifies that Greenpeace will come to San Juan to help stop Barrickand its operations in San Juan province and help prevent the environmental damage that the "Veladero project'' will cause. He is also confident that the people of San Juan will join efforts to fight Barrick Gold, as in America alone, this company is being held responsible for water pollution and the deaths of 33 people by cyanide poisoning.

Barrick closing Holt-McDermott mine
The Globe and Mail, Friday, October 17, 2003 - Page B5

Barrick Gold Corp. is winding down operations and cutting the 200 jobs at the Holt-McDermott mine outside Kirkland Lake, Ont. About 40 workers will be let go in January, said spokesman Vince Borg, and the other jobs will disappear as the year progresses. The mine's gold reserves have been exhausted, he told Canadian Press.

Latest on Homestake/Barrick's Lead Mine in South Dakota. (Black Hills Pioneer, October 17, 2003)
http://www.zwire.com/site/news.cfm?BRD=1300&dept_id=156923&newsid=10338617&PAG=461&rfi=9
"Barrick officials took a black eye once in the public relations arena when the company was miscast as attempting to dump the property onto the nation's taxpayers. They have no interest in getting burned again that way."

VANCOUVER -- Canadian gold producer Barrick Gold Corp. has secured a foothold in Russia with an agreement to pay $160-million (U.S.) to acquire close to one-third of London-listed gold producer Highland Gold Mining Ltd., which has one mine and three development projects in Russia.

Analysts said the transaction gives Barrick a relatively low-risk way to enter Russia, where natural resource companies have been on a buying spree in recent months as a result of improved investment conditions and the country's stores of oil, gas and minerals.

"As a major gold producer, Barrick needs to have an interest in any country that has big deposits and where the investment climate is improving," said Kerry Smith, an analyst with Haywood Securities Inc. "This gives them a less complicated entry strategy."

In a statement, Barrick chief executive officer Gregory Wilkins said the deal "provides us with a window into one of the world's most prospective gold mining areas" and that Barrick invested based on the improved investment climate in Russia and the abundance of quality gold targets in the region.

Barrick said yesterday it will pay about $43-million to acquire 10 per cent of Highland Gold from South Africa's Harmony Gold Mining Co. Ltd. The company has also agreed to acquire another 29.6 million new shares of Highland for an additional $116-million. That transaction is subject to due diligence and is expected to take about two months. If that additional share purchase goes ahead as planned, Barrick will own 29 per cent of Highland Gold.

Highland Gold has production of about 194,000 ounces a year, compared with Barrick's 5.5 million ounces. But analysts said the deal was more significant for providing Barrick an entry into Russia than for increasing its production.

Many major mining companies have been hunting for properties or potential partners in Russia, and others will likely follow Barrick's lead in coming months, said Clive Johnson, president and chief executive officer of Bema Gold Corp. Bema runs the Julietta gold mine in Russia and has been operating in the country since 1998.

"A number of major mining companies are looking how to get involved in Russia -- I think the issue has been finding the right partner," Mr. Johnson said.

Even with an improved investment climate under Russian President Vladimir Putin, local contacts and knowledge are crucial when it comes to getting a project through the local bureaucracy and a complicated process of obtaining permits, Mr. Johnson said.

Julietta, for example, is 21-per-cent owned by the two Russian prospectors who discovered the deposit, Mr. Johnson said, who have been invaluable in seeing the project through to production.
Mr. Johnson said the intense interest among mining companies in Russia reflects a gold price that has gained ground over the past two years, the rush by producers to replace dwindling reserves and greater confidence that projects can be completed without political interference or regulatory problems.

In 2000, Vancouver-based Pan American Silver wrote off its $37-million investment in the Dukat silver deposit in Russia's Magadan province after its development became bogged down in legal wrangles with Russian interests. That and other episodes made many companies wary of putting money into Russia, but recent months have seen several major transactions as confidence appears to be growing. Last week, Russia won an investment-grade rating for the first time in its history. Moody's Investors Service Inc. upgraded Russia's rating to Baa3 from Ba2, citing the country's pro-market reforms and rapid economic development in the past five years. Under Moody's classification, Baa3 is a medium investment-grade rating, while the lower Ba2 is a speculative grade. The ratings are a measure of the risk associated with a country's debt.

"In Russia, you're seeing some dramatic changes that are enabling people to feel confident about doing business there," Mr. Johnson said. He added the mining sector is catching up to a trend already evident in the energy sector, where major companies have poured millions into Russia. Exxon Mobil is investing $12-billion in a large oil project in Russia. The company is also in discussions to buy a big minority stake in OAO Yukos, Russia's top oil company.

Barrick shares rose by 0.12 per cent to $24.88 (Canadian) on the Toronto Stock Exchange. Bema shares rose 1.67 per cent to $3.65, while the S&P/TSX Capped Gold Index overall rose 1.5 per cent.

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.

Blanchard and Co. Inc., the largest retail dealer in physical gold in the United States, received word today from the U.S. District Court for the Eastern
District of Louisiana that its case against Barrick Gold Corp. and J.P. Morgan Chase & Co. may now move into the discovery phase of the lawsuit. The court denied defendants' motions to dismiss Blanchard's complaint that Barrick and Morgan have violated U.S. antitrust laws by unlawfully combining to manipulate the price of gold and to monopolize the market in gold. The antitrust lawsuit was originally brought in December 2002.

In denying defendants' motions, the court stated: "Here, in the extraordinary market for gold and gold derivatives, consumers/investors are readily injured by market participants with sufficient market power to depress price."

Blanchard's CEO, Donald W. Doyle Jr., stated: "The court's decision brings us one step closer to obtaining justice for our clients, and for all gold investors, who have been damaged by Barrick and Morgan."

Having already served J.P. Morgan and Barrick with its requests for production, Blanchard expects to move into the discovery process immediately.
* * *
SOURCE Blanchard and Co. Inc.
Neal R. Ryan of Blanchard and Co. Inc.,
1-800-880-4653

Info from Democracy Now:

Tuesday, May 27th, 2003
Corporate Profiteering: From Congo to Iraq

Greg Palast Discusses the Congo War and Reveals Internal USAID Documents that Outline a Master Plan for Reorganizing the Entire Economy of Iraq
Greg Palast has been called "the greatest investigative reporter of our time"(Tribune Magazine). His book The Best Democracy Money Can Buy exposed the racketeering, swindling and backroom deals that passes for democracy in the new global economy. It became a New York Times bestseller.

Today on Democracy Now!, he talks about internal USAID documents that outline a master plan for reorganizing the entire economy of Iraq. The plans include the elimination of trade protections and the mass privatization of every industry in Iraq, including selling-off the oilfields.

Palast's book also explores the relationship between the Bush family and a Canadian mining company, the Barrick Corporation. Palast explains how as president, George Bush Senior changed a century old mining law that allowed Barrick to "swiftly lay claim to the largest gold find in America". In return, the company named Bush to a senior advisory position after he lost the White House. The company also poured money into the Republican party coffers during the 1997-2000 election cycle, an exceedingly generous gesture for a company based in Canada.

So, what is Barrick? According to Palast- the initial stake came from none other than Adnan Khashoggi- the Saudi arms dealer who arranged the Iran-Contra arms for hostage deal.

One of the companies Barrick owns is Vancouver-based Sutton Resources Ltd. In 1996- Sutton drove out anywhere between 30,000 and 400,000 local miners from the Bulyanhulu mining field in Tanzania. During the process- Sutton's bulldozers allegedly buried 52 people alive.

Barrick steadfastly denies the allegations.

Greg Palast, BBC investigative reporter and author of The Best Democracy Money Can Buy
Joan Kuyek, National Coordinator of MiningWatch Canada, which has called for an independent investigation of the Bulyanhulu mining massacre.
Link: http://www.gregpalast.com/ - Greg Palast Homepage http://www.miningwatch.ca/ - MiningWatch Canada
To purchase an audio or video copy of this entire program, call 1 (800) 881-2359.

CONGO: Companies profit amid genocide
BY JEFF SHANTZ

The death toll from the ongoing war in the Congo, which began in 1998, is higher than in any other since World War II, with an estimated 4.7 million killed in the last four years alone. The International Rescue Committee (IRC), an aid agency based in New York, reports that the mortality rate in the Congo is higher than any other country on the planet.

According to IRC president George Rupp, the crisis in the Congo is "a humanitarian catastrophe of horrid and shocking proportions. The worst mortality projections in the event of a lengthy war in Iraq, and the death toll from all the recent wars in the Balkans, don't even come close."

Despite these horrible facts, the crisis has gone largely unnoticed and unreported upon in the West. As David Johnson, the director of IRC operations in eastern Congo, has stated: "This is the worst calamity in Africa this century, and one which the world has consistently found reasons to overlook."

The war started in August 1998, when an uprising backed by the Ugandan and Rwandan governments (which receive their main support from the US and Britain) was launched in the country's eastern regions against the government of Laurent Kabila. The Ugandan government claimed it was defending its western borders against rebels based in Rwanda, while the Rwandan force claimed to be defending itself against Hutu militias on the Congo border. Apparently this border protection required Rwandan forces to occupy the diamond-rich town of Kisangani, 700 miles inside the Congolese border.

The conflict quickly spread, as combatants from Angola, Namibia and Zimbabwe entered the war, ostensibly in support of Kabila's government. There has been evidence of involvement by mercenary companies, including the US company MPRI, Britain's Sandline and the South African Executive Outcome.

The responses to the crisis, or failures to respond, by Western governments have been motivated by their interests in the vast mineral resources of eastern Congo. Most of the Congo's gold production comes from the northeastern parts of the country that have experienced most of the conflict.

The main gold exploration ventures in Congo are those of Banro, a Canadian company cited for violations by the UN Security Council, and the Anglo-American/Barrick joint venture. Banro, through its 93%-owned subsidiary, SAKIMA SARL, controls 10 mining permits and 47 mining concessions covering an area of 10,271 square kilometres of eastern Congo. After an agreement with the government of Congo, Banro came to hold 100% title to the Twangiza, Kamituga, Lugushwa and Namoya gold deposits.

South Africa's AngloGold, the world's largest gold producer, and Barrick Gold of Canada, the second largest gold producer, joined together on an exploration venture encompassing 57,000 square kilometres of north-eastern Congo in the area along the Ugandan border which has been torn by conflict. Barrick had succeeded, in 1996, in getting the Gold Office of Kilomoto, the government monopoly of the country's former dictator, Mobutu Sese Seko, to transfer mining rights over almost all of its 82,000 square kilometres of land to Barrick. The area holds an estimated 100 tons of gold in reserve. George Bush senior was instrumental in winning the Barrick deal.

Another Canadian outfit, First Quantum Minerals, a firm with copper-mining interests, was cited by a special UN panel for paying government ministers to obtain mining rights. According to the report, First Quantum offered the government a US$100 million down payment. The payment list included the national security minister, the director of the national intelligence agency and the former minister of the presidency.

From Green Left Weekly, July 9, 2003.

Homestake future hangs in balance
Monday, June 02, 2003, http://www.miningnews.net/

THE future of North America’s deepest and most historic mine, the Homestake mine at Lead in South Dakota, hangs in the balance with its current owner wanting to shut down de-watering pumps and a team of scientists wanting it kept open for an advanced research project.

Legal action has started in a local court to force Canada’s Barrick Mines to continue de-watering the mine, which has stopped production after 126 years which took it to a depth of 2400m.

While Barrick wants to undertake an environmental clean-up around the mine and close it down permanently, the National Science Foundation is keen to use it in research into the neutrino, a sub-atomic particle first discovered in a 1966 experiment conducted half-way down the Homestake mine.

The foundation has earmarked Homestake as its preferred site for future research which would include building an underground laboratory the size of a football field to expand its physics research as well as research into deep-earth microbes.

The town of Lead and Barrick are waiting for a final decision from the foundation with the town fearing that an end to de-watering will see the mine flood and rival deep mines replace it as the preferred site.

Blanchard and Co. Reveals Anti-Trust Violation
By Barrick and J.P. Morgan

NEW ORLEANS, May 15, 2003-- Blanchard and Co. Inc., the largest retail dealer in physical gold in the United States, filed today with the U.S. District Court for the Eastern District of Louisiana a motion for leave to supplement and amend their anti-trust complaint to present new information further supporting Blanchard’s claim against Barrick Gold Corp. and J.P. Morgan Chase & Co. These new filings include previously undisclosed information about J.P. Morgan’s ownership interest in Barrick and Morgan’s monopoly position in the in the U.S. market for gold derivative contracts.

After numerous attempts by Barrick to discredit Blanchard’s case in the news media, Blanchard has brought motions to compel information from Barrick and J.P. Morgan about their joint efforts to manipulate gold prices and to share in the spoils of that manipulation.

The TrizecHahn Revelation

TrizecHahn Corp. was formed in 1996 from the merged interests of Argo Partnership L.P. (a J.P. Morgan & Co./J.W. O’Connor fund) and Horsham Corp. This newly formed corporation included several directors present on Barrick’s board as well as its chairman, Peter Munk. Through this combination, TrizecHahn became the controlling shareholder in Barrick Gold.

Also in 1996, according to SEC records, J. P. Morgan Capital Corp.’s managing director, Thomas S. Quinn III, was named to the Board of Directors of TrizecHahn and sat on its audit and executive committees. J.P. Morgan became a beneficial owner of Barrick through its controlling shareholder, TrizecHahn.

Blanchard and Co. CEO Donald W. Doyle, Jr., stated that “Blanchard’s discovery of the Argo Partnership documents linking J.P. Morgan to a beneficial ownership interest in Barrick helps to explain why J.P. Morgan provided Barrick with derivative contracts that virtually guaranteed it a risk-free profit. Even Barrick’s chairman, Peter Munk, recently stated that its ‘hedging program’ with J.P. Morgan ‘was almost too good to be true.’ We believe J.P. Morgan has benefited financially from its ownership of Barrick, and from Barrick’s manipulation of the price of gold.”

TrizecHahn (and its affiliates, including J.P. Morgan) realized more than $1.3 billion in profits from Barrick Gold stock.

-- Neal R. Ryan
Blanchard and Co. Inc.
1-800-880-4653
www.savegold.com

______________________________________________

BARRICK'S UNCOMFORTABLE SEARCHLIGHT
By: Tim Wood
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256D1A00755952?OpenDocument
Posted: 2003/05/02 Fri 17:00 EDT  | © Mineweb 1997-2003

"Barrick is as Barrick was. That just makes us all the more curious about Oliphant being made a sacrificial lamb. It’s a high price for fashion."

________________________________________________

http://www.webfin.com/en/news/news.html/?id=31666

TORONTO, March 7 (CP) -- Barrick Gold Corp. reassured investors Friday that it won’t face a hedging disaster similar to one unfolding at major competitor Newmont Mining Corp.

A blowup for Newmont, the world’s biggest producer, has sparked fears investors will shy away from other producers that sell gold in forward contracts at locked-in prices.

Unlike the Newmont situation, none of Barrick’s 19 bullion bank counterparties have unilateral and discretionary rights to terminate the forward sales contracts, Canada’s largest gold producer stated Friday.

Barrick also said it has sold forward only 21 percent of its gold reserves, and its contracts give it the right to sell gold at market prices or the hedge price, whichever is higher.

Earlier this week, Standard & Poor’s cut its credit rating on Newmont’s Yandal operations in Australia, acquired in the American company’s 2001 takeover of Normandy Mining, after reviewing the project’s hedging exposure.

Newmont has disclosed that Yandal faces a negative mark-to-market value of US$288 million on its hedge book. This situation could worsen because the mine’s counterparties have the right to require Yandal to settle the contracts in cash before they come due.

“That’s why we thought it was necessary to point out the differences in our case,” said Barrick’s Vincent Borg.

Investors are nervous, and Canadian gold stocks have suffered. Shares in Barrick and Placer Dome Ltd. have lagged the sector’s rally of the past year, largely because many investors and analysts distrust the companies’ derivative portfolios.

END-

________________________________________________

Gold Is on the Rise, So What's Bugging Barrick?
http://www.nytimes.com/2003/03/02/business/worldbusiness/02GOLD.html
By KURT EICHENWALD
New York Time, March 2, 2003

________________________________________________

A hot stock tip for Barrick Gold Chairman Peter Munk:
Why not buy your own company’s shares?
By Fabrice Taylor
The Globe & Mail, Toronto
Thursday, February 20, 2003
http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20030220/RVOXX/TPBusiness/MoneyMarkets

If Peter Munk is really concerned about shareholder value at Barrick Gold, here’s a modest proposal for him: Buy the stock.

Mr. Munk is not a substantial owner of Barrick shares. His direct skin in the business stretches to only about 1 percent (he owns a little more through TrizecHahn). Yet he’s the eminence grise, by virtue of the fact that he founded and built the company into one of the premier gold producers in the world. He now chairs the board, where he’s surrounded by friends.

What the chairman achieved at Barrick was no small accomplishment, and his much-maligned hedge program is the main reason the company was so successful.

Your average gold company is a much more prolific seller of new shares than of bullion bars. Without fail, a rise in gold prices is accompanied by a hurried rush to market by the industry, looking to raise cash for “general corporate purposes.”

Barrick was able to avoid that kind of dilution over the years thanks to low borrowing costs and predictable cash flows which, as it happens, were higher than they would have been had the firm not used futures contracts to sell its metal. Without Barrick’s hedge program either the company would not have grown or its growth would have come at a much higher cost and with higher risk.

But times change, gold rises, and investors freak out about derivatives. The spread between gold lease and interest rates has made hedging less attractive. And the spot price of gold has been rising, partly because of the Iraq factor but also for other reasons, such as what we would argue is a massive deterioration in the health of Washington’s coffers and therefore its currency, gold’s main competitor. Many gold investors share this view and therefore want to be exposed to its imminent rise.

When they look at Barrick, this is what they see: a company producing $360-million (U.S.) in trailing free cash flow yet quoted at almost $9-billion, or a multiple of about 25 times. That seems expensive, unless you think free cash flow is going to rise substantially.

There are problems at Barrick’s mines (at most gold mines, actually). Costs are higher than expected, the gold’s not coming out of the ground quickly enough and the grades are not as rich as might have been hoped. Still, the company is sitting on some of the better deposits in the world, so presumably the operations can produce increasing cash in a climate of rising bullion prices.

That leaves the hedge book. Marked to market, Barrick’s book is in the red to the tune of about $640-million. In the first quarter of 2001, it was positive by roughly the same amount. (That’s not an out-of-pocket expense; rather, it’s more of potential opportunity cost.) Spot gold has risen so fast that it’s leaving Barrick’s contracted prices in the dust.

That’s not necessarily a problem, since Barrick can defer delivery into its contracts and enjoy the full richness of spot prices. It did so in January for the first time. In other words, it seems to have the best of both worlds. But deferring delivery, as the name implies, only postpones it, and in fact can mean lower prices since prevailing lease and interest rates set the futures price. Barrick’s deliveries can be deferred for as long as 15 years, so clearly a long period of rising gold prices and low interest rates make the hedge book look like a ball and chain. If you really like gold long term, you can find better investments.

But still, even with the hedge policy, which Barrick continues to curtail, the stock price might be higher if investors could have complete faith in it and, more importantly, in the ability of Barrick’s mines to cover it. Alas, the only way to achieve that would be to look at every contract in Barrick’s book, which isn’t going to happen.

This is where Mr. Munk comes in. It wouldn’t be a complete remedy to what ails Barrick’s stock, which is cheaper by most metrics than other senior gold producers. But wouldn’t it help if he trumpeted his own conviction by wading into the market and adding substantially to his holdings? If he’s the de facto head of the company and he’s frustrated by the market’s disdain for the shares, that would help. Seymour Schulich and Pierre Lassonde, no fans of hedging, have their money in Newmont. Mr. Munk should do the same.

_______________________________________________________

Barrick's Hedge Book
By Steve Saville
February 18, 2003
http://www.gold-eagle.com/editorials_03/milhouse021803.html

Barrick Gold (ABX) is not one of our stock selections nor is it ever likely to be as long as it has a large hedge book, but its latest financial results (released last week) are worth commenting on.

ABX produced 5.7M ounces of gold in 2002 and made a profit of US$193M. The company forecast that 2003 production would be 5.4M ounces. However, as is usually the case with this company the most interesting aspect of the latest ABX results was the information that was disclosed about its hedge book. This information is particularly interesting because what Barrick does with its enormous hedge book can effect the entire gold industry.

As they have done every quarter for as long as anyone can remember, Barrick's management crowed last week about the fact that their forward sales program had allowed them to sell gold in the latest quarter at a price that was above the average spot price. They also confirmed that during the first several weeks of 2003 they had taken advantage of their ability to defer delivery into forward sales contracts and had, instead, sold 100% of their gold at the spot price. They did this because the spot price was higher than their forward sales price. This might seem like a logical thing to do, but it means that a liability has simply been pushed into the future. Furthermore, regardless of the current spot price it would only make sense for Barrick to defer delivery into forward sales contracts if they were confident that the spot price was going to be lower in the future than it is today. In other words, by their actions Barrick's management is saying that a gold price in the $350-$380 range is an aberration and that the price will fall back to $325 or lower.

At the end of 2002 Barrick's hedge book had a mark-to-market value of negative $639M. At the end of 2001 the mark-to-market value was positive $356M, so there was an unrealised loss of $995M in the hedge book during 2002. Deducting the reported earnings of $193M we get a net loss for 2002, including unrealised losses on derivatives, of $802M. So, during one of the best years for the gold price since the 1970s one of the world's largest gold mining companies lost $802M. If the gold price ends 2003 at $450 then Barrick will, at that time, have a hedge book with a mark-to-market value of negative $2.4B (assuming that all of this year's production is sold at the spot price). In this case it would have taken less than 2 years to wipe out all the gains achieved by the forward sales program over the past 15 years.

_______________________________________________________

GOLDEN FLEECING?
A New Orleans retailer is accusing a mining giant and one of the biggest names on Wall Street of illegally manipulatin the price of gold
By Stewart Yerton
New Orleans Times-Picayune
Sunday, February 16, 2003
http://www.nola.com/business/t-p/index.ssf?/base/money-0/1045378910214960.xml

In a David-and-Goliath antitrust battle that’s drawing intense interest from the world of avid gold investors, a New Orleans retail gold dealer is going toe-to-toe in an increasingly pitched legal fight against one of Wall Street’s oldest and most prestigious investment banks and a Canadian mining giant. The allegation: that the bank and the mining firm have colluded to drive down the price of gold to the detriment of individual investors.

In the latest volley last week, Blanchard and Co. Inc. of New Orleans updated its complaint against Barrick Gold Corp. of Toronto and J.P. Morgan Chase & Co. of New York.

Like its predecessor suit, the amended complaint filed in U.S. District Court in New Orleans asks the court to order Barrick to stop the alleged price manipulation. In a sign of just how heated the battle has become, each has accused the other of libel. Also last week, Barrick fired Chief Executive Randall Oliphant, who has been credited with devising the company’s gold-hedging strategy, which is at the center of the lawsuit.

Barrick is preparing a detailed response to Blanchard’s complaint and expects to file it in court in New Orleans by month’s end. In the meantime, the mining firm is addressing the allegations broadly, asserting, among other things, that Blanchard’s complaint simply makes no sense.

“Why would a company such as Barrick be interested in depressing the price of the only product it produces?” said Vincent Borg, a Barrick spokesman.

“Why would we be interested in depressing the price of our product?” The answer, said Blanchard spokesman Neal Ryan, is that Barrick, with support from J.P. Morgan, has positioned itself to profit from lower gold prices—and has taken steps to make sure the price goes down. “We believe we have found a specific instance where Barrick and J.P. Morgan have been colluding,” Ryan said. “That’s where we have a point of contention.” A spokesman for J.P. Morgan declined to comment on the case.

The dispute has surfaced as a major development in the world of avid gold investors, the so-called “gold bugs,” who closely watch the precious metal, sometimes weaving elaborate, conspiracy-filled theories to explain price fluctuations.

“In th