DROOY Durban Deep- Best S. African Mine Message Board

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Gold/Mining/Energy : DROOY Durban Deep- Best S. African Mine

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To: B Hamilton who wrote (463)	2/12/2000 7:02:00 PM
From: baystock	Read Replies (2) of 851

A post I found on Kitco on DROOY's hedging. Personally I agree with the poster that DROOY would be better of buying RANGY then chasing after a bunch of small mines in Australasia: Date: Sat Feb 12 2000 18:34 Gold Dancer (John Disney/Longj) ID#430221: Copyright © 1999 Gold Dancer/Kitco Inc. All rights reserved I think it is a little hard to predict what the hedge book will do for Durban without knowing what they paid for the 500,000 of calls at $325. If these were bought when gold was still under $300 they got them cheap and now they are worth a lot more. If they bought them when gold was $330 in the run up then they paid a lot for them. All I know is this: The calls were listed on the September results which means that if they didn't pay for them till the 4th qtr they must have been bought the last day of Sepember when gold was still under $300. The other thing I read was that Cannacord did a study of Deeps options and said that they will get a little more than the price of gold when gold is under $325 and when gold goes over $325 they will get a little less and when gold is $500 they will get $25 less. That seems like a very good hedge position to me. Now of course it would be better not to be hedged at all but when gold was going down day after day and you're a high cost miner you had better protect your company which is what they did. Now they have reversed course and when the 1st qtr earnings come out in April I bet they are pretty good and the stock will be flying. The end result seems to me to be between both of you and a little closer to Disney. And John, don't say too many bad things about Rangy because that company will be adding $60+ million a year to Deeps earnings at $500 gold. I expect that when Deeps gets to $2.50 they will go after Rangy on a stock deal. Kebble ain't going to be out done by Harmony. These mining boys are just like the high tech boys; in competition with one another. That's just my opinion and it may not happen but I think it is a natural now with Brett gone and Kebble owning over a million shares of Rangy. Gold Dancer

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