American Barrick Resources Corporation Case a. Explain the value chain for gold mining firms (how can a mine create a competitive advantage relative to its rivals). What are the factors that may explain exceptional performance of ABX relative to the other gold mines? To create a competitive advantage‚ a mine has to properly manage its exposure to gold price fluctuations. This is not an easy thing to do since there are so many factors to consider: when‚ how much‚ and how to hedge the gold
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Case WriteupCase study 2: American Barrick Resources Corporation FNCE 6909 – Corporate Risk Management Due November 1‚ 2012 Presented By: Justin Merow on November 11‚ 2012 Executive Summary The following case study reports on a highly successful gold mining company‚ American Barrick Resource Corporation. We discuss herein the many of the techniques being used in their hedging programs and the variation between such programs. The company itself was founded by a gentleman named Peter Munk
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Derivative Cases Case 2 American Barrick Resources Corporation: Managing Gold Price Risk 1. Hedging Motivation In terms of the gold mines owners‚ they hedge nothing against the price drop risk of gold output. As the profits‚ cash flows and stock price were tied of gyrations in the price of gold. As to the gold‚ there was always a ready market for their product‚ at market prices‚ once extracted from the earth and refined. Hedging against the risks can protect the downside of gold price‚ enable
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DERIVATIVE CASES CASE STUDY II AMERICAN BARRICK RESOURCES CORPORATION: MANAGING GOLD PRICE RISK Group II - Cohort 5 American Barrick is the largest gold producer in North America. The implementation of the gold-hedging program differentiated the firm from other major gold rivals and improved its reserve and financial strength. In 1995‚ American Barrick ’s latest
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1. What are the challenges faced by extractive mining corporations in their attempt to establish subsidiary operations in developing nations As major multinational extractive mining corporations continue to expand their developing country footprints‚ they are finding challenges in carrying out corporate social responsibility (CSR) to achieve a sustainable balance of benefits for business‚ its employees‚ stakeholders and the communities in which they attempt to establish subsidiary operations. In
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financial instruments‚ how sensitive would Barrick earnings and cash flows be to gold price changes? For every 1% change in gold prices‚ how might its stock be affected? How could the firm manage its gold price exposure without the use of financial contracts? In 1992‚ American Barrick produced and sold over 1‚280‚000 ounces of gold at an average price of $422 per ounce‚ while the market price was $345 per ounce. If there is no hedging program‚ American Barrick needs to sell the gold at price $345 per
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Units Unit Cost Total Cost From the Beginning Inventory 1840.00 20.00 36800.00 From the first purchase 600.00 20.25 12150.00 From the second purchase 380.00 21.00 7980.00 2820.00 56930.00 From the Second purchase 420.00 21.00 8820.00 From the third purchase 400.00 21.25 8500.00 From the second purchase 200.00 21.50 4300.00 1020.00 21.20 21620.00 Units Unit Cost Total Cost From the Beginning Inventory 1020.00 21.20 21624.00 From the first purchase 700.00 21.50 15050.00 From the second
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B. 1. One organization that I feel has the best longterm position in terms of their stock market price is Barrick Gold. http://finance.yahoo.com/q/bs?s=ABX+Balance+Sheet&annual http://www.barrick.com/investors/annual-report/financial-highlights/default.aspx The most important factor in any organization from what I learnt is how much it can pay its shareholders in dividends. Barrick gold has increased per year their annualized dividend US cents per share from 48 cents per share in 2010 to 60
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The purpose of this case analysis is to describe the communication problem and the resulting symptoms that are occurring with Barrick Gold Mine Company happening at the peak of Andes range‚ the Pascua-Lama development‚ and the concerns of its stakeholders. As an ending to this case analysis there shall be a solution provided on how the massive gold mine company can solve the disputes with its stakeholder groups. The main communication problem that Barrick is facing is caused by their own hand‚
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GROUP SUBMISSION: Due 27 June 2011 Midnight American Chemical Corporation CASE QUESTIONS Read the American Chemical Corporation case that was handed to you. The underlying question to be answered is should Dixon acquire the Collinsville plant. In your case write-up‚ you can discuss the questions given below. Please note that the given questions are to be used only as a guide for your discussion. You do not need to answer the questions in the sequence they are presented. You can use the spreadsheet
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