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barrick bullish for gold in 08

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    NEW YORK -

    The high price of gold should fuel strong growth in 2008 for Barrick Gold Corp. following a banner 2007, the company's president and chief executive said Monday.

    "It's an excellent time to be in the gold business," Gregory Wilkins said during a speech at BMO Capital Markets Metals and Mining Conference, which was broadcast online.

    The precious metal's high price comes despite a drop in mine supply, and is most likely due to investment demand, he said.

    Barrick Gold (nyse: ABX - news - people ) prepared for a drop in the value of the U.S. dollar and subsequent gold prices spike by building five new mines in the last few years to boost capacity, he said.

    Yet even as the metal has risen in value, costs have grown. Currently labor accounts for 30 percent of costs, energy 20 percent, and consumables and maintenance about 20 percent, he said.

    The company has looked globally to get supplies, and in some cases is getting factory-direct pricing, he said. With the high price of gold, margins have jumped to their highest point in recent memory, he said.

    In 2007 earnings were about $1 billion, and the fourth quarter saw record earnings. Since then the price of gold has risen even higher, he said. The company ended 2007 with $2.2 billion in cash, he said.

    "The investment case for Barrick is remarkably in place," he said.

    Shares of the Toronto-based company fell $1.15 to $49.01 in afternoon trading.
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