blanchard gold suit

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    12:50a ET Thursday, December 19, 2002

    Dear Friend of GATA and Gold:

    Reports from the GATA Army are that the
    Blanchard lawsuit against Barrick Gold and
    Morgan Chase is getting excellent mention on
    Canadian, European, and Asian television
    business news programs and may be affecting
    the market. A Reuters story including
    Barrick's denial of wrongdoing is appended

    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc.

    * * *

    Barrick dismisses anti-trust allegations

    TORONTO, Dec 18 (Reuters) -- Blanchard and
    Co., a U.S. gold and coin dealer, said on
    Wednesday it had filed an anti-trust lawsuit
    against Canadian miner Barrick Gold Corp.
    and J.P. Morgan Chase & Co. for manipulating
    the gold price, but Barrick dismissed the
    claims as "ludicrous."

    New Orleans-based Blanchard said in a
    statement distributed by Business Wire that
    its anti-trust suit accused Barrick, the
    world's second-largest gold producer, and
    U.S. financial services firm J.P Morgan Chase
    of making $2 billion in short-selling profits
    by suppressing the price at the expense of

    Privately held Blanchard said in the
    statement that it was seeking in legal papers
    filed to the U.S District Court for the
    Eastern District of Louisiana to end the
    trading agreements between Barrick and J.P.
    Morgan Chase, and other bullion banks.

    It is also seeking payment to Blanchard's
    clients for losses caused by the alleged
    price manipulation.

    Toronto-based Barrick said the allegations
    were "totally without merit" and said it
    would vigorously defend itself and pursue all
    of its legal rights.

    "Although Barrick has not had an opportunity
    to review the complaint in detail, the press
    release contains numerous factual
    inaccuracies and defamatory statements," a
    Barrick spokesman said, reading from a
    prepared statement.

    Shares in Barrick, which is expected to
    produce 5.7 million ounces of gold in 2002,
    were down as much as 89 Canadian cents after
    Blanchard's statement, but rebounded to close
    down 20 Canadian cents at C$24.45 in Toronto.

    Blanchard's statement said the lawsuit
    alleges that in the past five years Barrick
    and J.P. Morgan Chase injected millions of
    additional ounces of gold into the market, or
    several times more than the annual production
    of every gold mine in South Africa, the
    world's biggest gold producer.

    "Since the end of 1987, when the
    collaboration between Barrick and J.P Morgan
    Chase began, the growth of global income and
    wealth would have lifted the gold price to
    approximately $740 (an ounce) if the price
    had been able to respond to the normal laws
    of supply and demand," Blanchard's chief
    executive, Donald Doyle, said in the

    "If gold had kept pace with inflation, the
    price today would be approximately $760."

    Blanchard said its suit claimed that by using
    privately negotiated derivative contracts and
    concealing additional billions of dollars
    worth of physical gold with off balance sheet
    accounting, Barrick made it virtually
    impossible for gold analysts and investors to
    determine the size and the market impact of
    its trading position.

    The lawsuit further alleges that J.P Morgan
    Chase financed Barrick's repeated short
    selling with advantageous terms not available
    to others, including deferred repayments and
    no margin calls, Blanchard said.


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