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Gold/Mining/Energy : Gold Price Monitor
GDXJ 92.99+2.9%Nov 7 4:00 PM EST
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To: IngotWeTrust who wrote (52844)5/18/2000 5:13:00 PM
From: lorne  Read Replies (1) of 116753
 
Hi ole 49r. Here's some more Ashanti stuff to brighten up your day a bit. :-)
Ashanti's New Lease Of Life
May 15, 2000

" There are four main issues we are grappling with. The first is the hedge book, which brought in the crisis, which we had to do something about. The problem is not so much the hedges that we put in place. The problem with the hedge book was the balanced sheet and the margin limits the company incurred. So really what the company has decided is that three years from now we will correct or adjust the hedge book in such a way that if the very same set of events occur again that kind of crisis will not result. We are in a sense reverse-engineering what we have now, so that, if the same events occur five years from now, we won't have the problem."

HEDGING CONTRACTS
" The reason why we have to keep hedging is very simple. You hedge when you need a guaranteed revenue stream to complete a project over say four-five years which requires say $20 million. If you can't guarantee the revenue stream, you can't come up with the $20 million. Now, as in the case of Ashanti, we have $400 million in debt we had to pay off. If we couldn't guarantee a revenue stream, we couldn't pay off the debt. That is why Ashanti has to hedge. We have gold prices still falling and if we depend on the prices we may not be in the position to pay off our debts."
Full story >>>
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