Any DROOY holders like to comment?
I was trying to do some analysis on DROOYs hedge book using the info at drd.co.za
I am rather new to this so correct me if I am wrong, but to me it looks like there a couple of really nasty positions in there book if you are a gold bull.
Here is my summary of their near term South African hedges:
Jul 00 - Jun 01 South African hedge Book Analysis
1. Forward sales; 77,000 ounces; US$279.73
2. Forward sales; 563,750 ounces; US$242.06(R 1,752.50)
3. Fwd purchases; 189,469 ounces; US$333.72
4. Calls sold; 106,100 ounces; US$319.50
5. Calls bought; 500,000 ounces; US$320.00
6. Calls bought; 131,250 ounces; US$317.68(R 2,300.00)
So if the gold goes to $350 tomorrow and stays there:
1. (SHORT) $350 - $279.73 = 70.27 * 77,000 = $5,410,790 in missing revenues
2. (SHORT) $350 - $242.06 = 107.94 * 563,750 =
$60,851,175 in missing revenues!!!!
3. (LONG) $350 - $333.72 = 16.28 * 189,469 = $3,084,555.32 in extra revenues
4. (SHORT) $350 - $319.50 = 30.5 * 106,100 = $3,236,050 in negative revenues
5. (LONG) $350 - $320 = 30 * 500,000 = $15,000,000 in extra revenues
6 (LONG) $350 - $317.68 = 32.32 * 131,250 = $4,242,000 in extra revenues
In conclusion their hedge would cause them to miss out on $47,171,459.68 in revenues. They would be giving a bunch of gold away!!! In essence they are helping to suppress the price of gold by guaranteeing that they will be giving it away the rest of this year and part of the next...sucks.
They have some similar nastiness for next year.
Forward Sales; 430,000 ounces, US$242.06
Also if anybody would like to comment on how currency fluctuations will effect this, I would appreciate it. Note that some positions are held in dollars and others in Rands.
Thanks |
