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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO)
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To: John Dally who wrote (37)6/7/2002 4:17:09 PM
From: russet   of 158
 
John, forget my first response.

My thoughts were that NGX would likely not want to show what could be a large loss on next quarters income statement by doing what you think they would do. It may or may not be a large loss depending on how many contracts expire worthless, so it's better to wait for the 2nd quarter statements and see what they do.

Also my thoughts were that the company would rather trade high interest rate loans by using the money from the PP's to pay down as much of the debt as possible, and borrow gold to close out any options that are called in effect trading low gold lease rates for the higher loan interest rates, and by doing so, completely avoid showing a loss resulting from writing the options.

They may, or they may not, or they may do a combination. It is not worth discussing it much further. You are right, I have made it too complicated by thinking they would act to avoid showing a loss on the income statement in the next quarter.
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