HM NEWS: (HeHeHe I've been plastering these guys with e-mail to release their hedge position - and they released it TODAY):
Monday October 18, 11:15 am Eastern Time
Company Press Release
SOURCE: Homestake Mining Company
Homestake Reports on Its Hedging Program and on a Major Reduction In Shareholding by Malaysia Mining Corporation
SAN FRANCISCO, Oct. 18 /PRNewswire/ -- Homestake Mining Company (NYSE: HM, Australia: HSM, Toronto: HCX) today reported that it has virtually no unprotected call options in its hedge portfolio (see attached table) and no margin call requirements in any of its existing hedge contracts despite recent changes in the price of gold. Over 95% of its reserve base can benefit from the rising gold market. Homestake further confirmed that it is not exposed to mark to market earnings adjustments with respect to its precious metals contracts.
? (Photo: newscom.com newscom.com
Although Homestake's policy provides for the use of forward sales contracts to hedge up to 30 per cent of each of the following ten year's expected annual gold and silver production, it is currently largely unhedged due in part to the previously announced closure of a major portion of its hedge portfolio. In that transaction, which took place on July 29, 1999 when the price of gold was $254/oz, Homestake closed out 245,000 ounces of US dollar denominated forward sales and realized $35 million. ``We are looking forward to continued strengthening in the price of gold, said Jack E. Thompson, Homestake's Chairman and Chief Executive Officer. Our shareholders are well positioned to derive the full benefit of the situation.'
In a separate development, Homestake was advised that during recent weeks, Malaysia Mining Corporation (MMC) sold over 60% (approximately 11.2 million shares) of its shareholding in Homestake. MMC was a major shareholder of Plutonic Resources Limited, which was acquired by Homestake in April 1998. The MMC shareholding was placed among major institutions in the US, Canada, Australia and Europe. ``This transaction is another demonstration of the exceptional liquidity of Homestake's shares,' added Mr. Thompson.
Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. The Company also has active exploration programs in Argentina. Homestake currently produces approximately 2.3 million ounces of gold annually from 14 operating mines. Shares of the Company's stock are listed on the New York Stock Exchange, the Toronto Stock Exchange, the Australian Stock Exchange and the Basel, Geneva and Zurich Stock Exchanges in Switzerland. Homestake began gold mining operations over 120 years ago, and is one of the oldest listed companies on the New York Stock exchange still in its original business. It has received numerous industry awards for its responsible environmental health and safety management programs. For additional corporate information, please visit Homestake Mining Company on the Internet at homestake.com.
Homestake Mining Company
Hedge Position as of September 30, 1999
Expected Maturity or Transaction Date
1999 2000 2001 2002 2003 Post 2003 Total
Gold
Forward Sales Contracts:
Ounces 27,480 85,080 10,000 10,000 259,200 391,760
Price per Ounce,
US $ $421 $430 $400 $403 $403 $410
Put Options Owned:
Ounces 110,000 80,000 190,000
Price per Ounce,
US $ $279 $253 $268
Call Options Written:
Ounces 95,000 80,000 175,000
Price per Ounce,
US $ $275 $253 $265
Call Options Owned:
Ounces 80,000 80,000 160,000
Price per Ounce,
US $ $268 $268 $268
Australian Dollar
Denominated
Contracts(a)
Forward Sales
Contracts:
Ounces 24,800 24,800 24,800 24,800 50,800 150,000
Price per Ounce,
US $ $343 $343 $343 $343 $343 $343
Put Options Owned:
Ounces 30,000 120,000 120,000 270,000
Price per Ounce,
US $ $330 $339 $349 $342
Silver
Forward Sales
Contracts:
Ounces (Thousands) 755 3,020 1,200 4,975
Price per Ounce,
US $ $6.34 $6.33 $6.00 $6.25
(a) Expressed in US dollars at an exchange rate of A$ = US$ 0.6527
SOURCE: Homestake Mining Company |
