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Gold/Mining/Energy : Gold Price Monitor

GDXJ 93.43

-4.5%

Nov 20 4:00 PM EST

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To: Ken Benes who wrote (58206)	9/16/2000 4:11:36 AM
From: Alex	Read Replies (2) of 116764

Mining companies face changes in gold hedging procedures Platt's Metals Week, 11 Sep 2000, pp 12-13 The use of hedging and forward sales to boost gold revenues could become more expensive, according to a study by the World Gold Council. The rise in gold prices in September 1999 prompted bullion banks to consider levying additional hedge premiums on mining companies that are deemed less credit-worthy. The average realised price on hedged gold of marginal producers in North America and Australia is not fully covering costs of production. Also, the substantial decline in gold exploration expenditure implies that the reserve base is not being replenished. 'This has implications for existing credit lines and the ability to hedge reserves in the ground', the report said. The study concludes that the growth in gold production is certain to peak, if not level out or even decline throughout the next decade.

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