Barrick has been selective about which hedges it chooses to terminate first.

So far, the company has only eliminated 1.1 million of its three million “fixed” hedging contracts, in which it has to deliver physical gold to buyers at prices well below current levels.

However, the company has unwound most of its “floating” contracts, which are essentially just financial obligations. Barrick’s liability related to the floating contracts is now US$1.5-billion, down from US$3.7-billion at the end of September.

The difference between the contracts is the key to Barrick’s unwinding strategy. With the fixed hedges, the company is trying to be opportunistic and pick the best times to go into the market and buy gold. Unwinding the floating hedges, on the other hand, does not require any activity in the gold market.