RE: Strange how gold has gone to
I agree. ABX should move higher from here.
Since August ABX has increased about 50% while its cash
cost margins have doubled.
ABX is also undervalued relative to other large producers.
G has a mkt cap 70% of ABX. Its reserves and production
are only 33% of ABX's reserves and/or production.
AEM has a mkt cap 22% of ABX. Its reserves are only 13% of
ABX's. Its production is only 3% of ABX's production.
ABX should cash flow $4B in 2008. It is cheap trading at
only 10x cash flow.
ABX is much more diversified and has a much deeper project
pipeline than other producers.
ABX's 9M oz forward sale merely allows them to bring on
more production than they could otherwise. The sale should
be looked at as ABX having sold part of an undeveloped resource
but retained the mining portion of the risk and reward.
BUY BARRICK!