Barrick Gold (NYSE:ABX) has ridden the snake downwards of late. Gold prices have plummeted. Numerous production problems abound which means negative cash flow implications. Projects are being shut down which sounds like defeat and sunk costs disappearing into the swamp. Can’t exactly see the dividend being increased soon.
What more can you disclose to depress the value of your stock?
I know seeing as the cash flow really stinks, lets raise up some more capital and dilute the investors who have been loyal and believe in gold long-term. Special note to loyal investors. This is a commodities stock. Very difficult to stay loyal despite management’s best efforts.
Bought deal of course. No nasty road show with investors asking embarrassing questions in open mic situations. Institutions who are considered smart money have loaded up. Why the dynamics of gold remain the same.
The institutions are crowning Barrick as royal. Pushing in a lot of cash. Stopping some cash sucking projects and letting the predator come out and play.
Gold believe what you may.
Barrick is being set up for the long-term. Retail investors are paying the price. Other cash strapped gold miners are quivering like mice caught with a hungry snake.
Snacks anyone. Because everything else sucks.
George Gutowski writes from a caveat emptor perspective.