Hedging destroying Aussie juniors...........
10/31/00 - AUSTRALIAN MINING CO CENTAUR'S STOCKS PLUNGE
MELBOURNE, Nov 01, 2000 (AsiaPulse via COMTEX) -- After yesterday warning that hedging was hampering its financial performance, shares in Centaur Mining and Exploration Ltd plummeted nearly 19 per cent this morning.
Centaur dropped 14 cents to 60 cents in thin trade at 1027 AEDT.
In its report for the quarter ended September 30, 2000, Centaur revealed that its gold, nickel and foreign exchange hedge books had severely hampered its position.
This had wound back the impact of strong production in gold and nickel.
Centaur joins a succession of junior miners, including Pasminco Ltd and Newcrest Mining Ltd, which have eithered suffered losses, or missed out on the massive upside potential, despite a historically low Australian dollar as a result of their hedge books.
"Whilst the operations at Mt Pleasant and Cawse have recorded steady gains overall performance of the company continues to be negatively impacted by the effect of open hedge positions, which on a commodity and currency basis have restricted the company's ability to take full advantage of the decline in the Australian dollar," Centaur said.
"Based on a current `mark to market', the gold, nickel and foreign exchange hedges, which have been in place for a significant period, have a significant negative value, with associated negatively monthly outflows and insufficient US dollar-based revenue to match the hedge exposures.
"The company is working diligently to immediately address these issues."
(C) 2000 Asia Pulse Pte Ltd
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INDUSTRY KEYWORD: Share/credit issues
Mining |
