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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC)

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To: miklosh who wrote (388)	10/9/1999 4:48:00 PM
From: Thomas M.	Read Replies (1) of 587

Letter in this week's Barron's: --------------------------------------------------- The statement in Cheryl Strauss Einhorn's column (Commodities Corner, October 4): "But don't expect more big gains from here," regarding Newmont Mining Corp.'s hedging activity needs clarification. The article states that Newmont "hedged 35% of its next two years of gold production when prices were trading at $270 an ounce in August." In fact, Newmont didn't sell forward. Rather, we took out an insurance policy by purchasing put options giving us the right-but not the obligation-to sell 2.85 million ounces at $270 per ounce through mid-2001. The options were paid for with offsetting call options on 2.35 million ounces of gold for delivery in 2004 through 2009 at prices ranging from $350 to $390 per ounce. Essentially, the transaction established a floor of $270 per ounce at a time when gold was trading at a 20-year low, while potentially committing only 4% of the company's reserves. DOUG HOCK Director of Public Affairs, Communications Newmont Mining Denver

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