Barrick

Background

Barrick Gold Corporation is the largest pure gold mining company in the world, with its headquarters in Toronto, Ontario, Canada; and four regional business units (RBU's) located in Australia, Africa, North America and South America.Barrick Gold Corporation evolved from a privately North American oil and gas company,Barrick Resources.After suffering huge financial losses in oil and gas,principal Peter Munk decided to focus on gold.Barrick Resources Corporation became a public traded company on May 2, 1983,listing on the Toronto Stock Exchange.The company’s first acquistion was the Renabie mine, near Ontario, which produced around 16,000 ounces of gold in 1984.In 1984, Barrick acquired Camflo Mining,which had operations in the province of Quebec and in the U.S. state of Nevada.Barrick’s effort to purchase was slowed by skepticism the company could assume Camflo’s debt of around $100 million.The sale was finalized in May, 1984, with terms that obligated Barrick to repay the debt to The Royal Bank of Canada within one year.The debt was fully paid in January, 1985.Barrick Resource’s next acquisition was the Mercur mine in Utah,in June, 1985,followed by the GolsStrike mine, in Nevada, in 1986.The Goldstrike mine is located on the Carlin Trend, estimated to hold 100,000,000 ounces of gold.The company’s name was changed to American Barrick Resources in 1986.It was listed on the NYSE in February, 1987.The name was changed to the present Barrick Gold Corporation in 1995.In a 1994 friendly takeover, American Barrick became the third largest gold mining company in the world when it acquired the Canadian mining company Lac Minerals, which owned properties in North and South America.

What is Barrick’s Risk Management Program ?

For Barrick, managing gold price risk was an integral part of business and one of the firm’s four stated business objectives.So, the company has hedged upto 25% and was fully protected against price declines in the near future upto 2-3...