Estimation of the production of gold from meikl mines

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American Barrick’s estimation of the production of gold from Meikl Mines had turned out to be far lower than the actual capacity. In addition to that, ABX explored areas around the Goldstirke property which further increased the amount of gold it could produce. ABX had hedged the risk of estimated production and now faced the question of how to hedge the additional capacity. In addition to this the gold prices and the interest rates were at an all-time low, which further made the task of entering into forward contracts, SDCs and options more difficult for ABX. Gold prices were also not expected to rise in the near future.

What should ABX do, in light of its Meikle Mine finding?

Reference no: EM131986760

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