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XMFSinchiruna (27.70)

If you own Barrick Stock...

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January 28, 2008 – Comments (5) | RELATED TICKERS: ABX , AEM

This might be a terrific time to consider getting out of your position and into another gold company that is on better footing.  Why the cause for concern?  There is no more compelling narrative within the financial world than the moves insiders make with their company shares.  They can spin their words to shareholders however they like, but you can't put a positive spin on this:

Insider transactions filed on Jan 14, 2008
Source: SEDI

Barrick Gold Corp. director Howard Beck sold 50,000 company shares at prices ranging from $47.74 to $48.55 on Jan. 7, 2008, bringing his total company holdings to 139,144 company shares.
Barrick executive vice president of exploration and corporate development Alexander Davidson exercised 50,000 options for company shares at $29.60 each on Jan. 8, 2008. He sold all of these shares the same day at prices from $50 to $50.02, bringing his total company holdings to zero.
Barrick executive vice president and general council Patrick Garver exercised 7,803 options for company shares at US$30.41 each on Jan. 8, 2008. He sold all of these shares the same day at prices from US$50.18 to US$50.21, bringing his total company holdings to zero.
Barrick executive vice president and chief operating officer Peter Kinver, exercised 100,000 options for company shares at $28.57 each on Jan. 11, 2008. He sold all of these shares the same day at prices from $52 to $52.21., bringing his total company holdings to zero.

Recommendation:  Sell Barrick immediately.  Buy Yamana Gold (AU) or Agnico Eagle (AEM) in its stead.  Both of these stocks are very well regarded by unaffiliated precious metlas analysts, and both are poised for consderable organic growth, especially in a rising price environment.  Barrick looks solid on paper, and does produce huge quantities of gold, but the company must (in my opinion) have some negative news coming out for the directors to behave in this way.

5 Comments – Post Your Own

#1) On January 29, 2008 at 5:07 AM, howeme (< 20) wrote:

Sinchiruna

Thanks for the heads up..........very much appreciated 

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#2) On February 08, 2008 at 5:53 AM, MGDG (34.87) wrote:

Barrick has been known to be excessively hedged. Maybe they feel Gold prices are to rise enough to create large losses in their hedge book. A note for those not familiar with Yamana the symbol is AUY.

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#3) On February 13, 2008 at 12:07 PM, XMFSinchiruna (27.70) wrote:

Sorry for the misprint on the Yamana symbol... it is indeed AUY.  Too bad there's not way to get in and edit the post.

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#4) On February 13, 2008 at 12:07 PM, XMFSinchiruna (27.70) wrote:

Sorry for the misprint on the Yamana symbol... it is indeed AUY.  Too bad there's not way to get in and edit the post.

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#5) On March 07, 2008 at 8:59 PM, XMFSinchiruna (27.70) wrote:

This could have something to do with the insider selling that prompted this post.  I just read the report linked below, and it looks like Barrick has one of the most unfavorable hedging positions I've seen in the industry.

Barrick Gold
Project Forward Sales 7,800,000 @ 336
Floating Spot Priced Contracts* 1,700,000 Spot@ 456

from:  http://www.virtualmetals.co.uk/pdf/FHB0208.pdf

I am reiterating my strong sell recommendation for Barrick, until I see the execs step up to the plate and buy back some of those shares.

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