Barrick Gold Corp. ABX-T says it has eliminated all of its gold hedges ahead of schedule.
The hedges had limited Barrick's ability to take advantage of rising gold prices, although they also were designed to protect the company from lower prices.
Toronto-based Barrick is the world's largest gold producer.
It said Tuesday that its positive view on gold prices spurred a decision to speed up the elimination of the hedges.
Barrick announced in September it would eliminate all its gold hedges within 12 months.
To fund the elimination, it issued equity for net proceeds of $3.9-million (U.S.) in September, and $1.25-billion in new long-term debt securities in October.
The hedges were contracts where Barrick had sold forward gold ounces and would receive a fixed price upon delivery. As a result, it was assured getting that price even if world prices fell but it could not benefit from any increase.
“With their elimination we no longer have any gold price related mark-to-market exposure and will now fully benefit from increases in the gold price,” said Aaron Regent, Barrick's president and chief executive officer.
“Barrick's gold production and reserves are now completely unhedged and our capital structure has also been simplified.”
For 2010, Barrick said it expects gold production to grow to between 7.7 million and 8.1 million ounces at lower total cash costs than 2009.
Barrick's shares closed at $44.86 Monday on the Toronto Stock Exchange.
