Barrick's 200 Million Ounce Silver Problem

[black5wan]

BIG TROUBLE FOR BARRICK AT PASCUA LAMA??
Pascua Lama is one of Barrick's largest gold and silver mines that is slated to be in commercial production by mid 2013. Harvey Organ believes Pascua Lama should have been in commercial production several years ago, but problems associated with Glaciers have kept them from doing so.
There has been on ongoing debate about the Glacier and water issues in both Chile and Argentina as it pertains to Barrick's mining operation of Pascua Lama.
I also believe there is bad news coming out of Pascua Lama. Again, this represents 25% of Barrick's gold reserves and if Pascua Lama is not allowed to go commercial, it would be disastrous for Barrick's stock price, balance sheet and contractual obligation to supply Silver Wheaton 170-200 million ounces of silver.

If Pascua Lama is unable to mine gold and silver without threatening the glaciers in both Argentina and Chile, Barrick will have to go into the futures markets and purchase silver to deliver to Silver Wheaton at its contractual price of $3.90 an ounce.

Source http://www.silverdoctors.com/barricks-200-million-ounce-silver-problem/

 

[SpacePete]

This article is from 2012, but can someone explain what does this means... contractual price of $3.90 an ounce????

Barrick will have to go into the futures markets and purchase silver to deliver to Silver Wheaton at its contractual price of $3.90 an ounce.

 

[black5wan]

This article is from 2012, but can someone explain what does this means... contractual price of $3.90 an ounce????

Barrick will have to go into the futures markets and purchase silver to deliver to Silver Wheaton at its contractual price of $3.90 an ounce.

Ah I missed the posted date which is in fact 2012. anyone know how this thing sorted out in the end?

IMHO, A mine sells its future production at a contractual price for a future settlement date.