Barrick Gold: Eliminating the Gold Hedging Strategy
Barrick Gold, the largest gold producer in the world, has taken steps to eliminate its longstanding gold hedging program. In its early years, Barrick’s hedging program was a key factor allowing the firm to grow amid falling gold prices. But Barrick’s management team faced questions about its hedging program when gold prices started to rise in the 2000s. The case allows students to review Barrick’s hedging program and consider the impact of its decision not to hedge going forward.
Collection: Ivey Business School (Canada)
Ref: IVEY-9B11B002-E
Format: PDF
Number of pages: 16
Publication Date: Mar 7, 2011
Language: English
What material is included in this case:
Description
Barrick Gold, the largest gold producer in the world, has taken steps to eliminate its longstanding gold hedging program. In its early years, Barrick’s hedging program was a key factor allowing the firm to grow amid falling gold prices. But Barrick’s management team faced questions about its hedging program when gold prices started to rise in the 2000s. The case allows students to review Barrick’s hedging program and consider the impact of its decision not to hedge going forward.
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Year: 2009
Geographic Setting: Canada
Industry Setting: Mining, Quarrying, and Oil and Gas Extraction;
Learning Objective
The Barrick Gold case introduces the concept of using hedges as part of a firm’s long-term strategy. It examines the arguments for and against hedging, as well as the impact that hedging has had on Barrick Gold. Students will be taken through an example of how gold hedging works and will receive an overview of the interests of the parties involved.
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