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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO)
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To: E. Charters who wrote (55)6/23/2002 11:36:23 AM
From: tyc:>  Read Replies (2) of 158
 
>>They borrow gold to do one thing, to sell it to finance their operations.

Wrong again ! in normal hedging, the mining company does NOT borrow gold. It is the bullion bank who borrows gold and sells it. Any counter-party failure would therefore simply mean that NGX would be obliged to sell its production at then spot prices rather than enjoying the contango. (Of course this failure to complete the deal on the terms arranged will occur only if it is to NGX's disadvantage. Even a failed counterparty would insist on the deal if completion were to its advantage)

And the whole process is NOT to finance their operations. It IS to assure debt repayments. Geez how wrong can a self-purported expert be ! I am not an expert and could be wrong....
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