By The Associated Press
Wednesday, September 9, 2009
Barrick Gold Corp., the world's biggest gold producer, said Wednesday that strong investor demand has prompted it to up Tuesday's announced share offering by $500 million to $3.5 billion.
Toronto-based Barrick will issue about 94.8 million shares at $36.95 per share and use the proceeds to eliminate all of its gold hedges.
Gold hedges are futures contracts that commit a company to selling the metal at set prices. While hedges guarantee certain cash flows, they often commit a metals producer to ship the gold at prices lower than the current spot price. Barrick's decision to pay off its hedges amounts to a bet that gold prices will keep rising.
Barrick Gold shares lost $1.85, or 4.7 percent, to $37.45 in morning trading.
