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Gold/Mining/Energy : Gold Price Monitor
GDXJ 97.99+0.3%Nov 11 4:00 PM EST
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To: Professor Dotcomm who wrote (64886)3/2/2001 1:32:42 PM
From: russwinter  Read Replies (1) of 116753
 
Yes, you are correct about the higher operating costs if local currencies advanced against the US $. But, Aust. and SA. producers have already committed to their delivery prices. Indeed, they can properly be characterized as the "kings of accelerated gold supply". Arguably, that's about all many of them do; speculate as shorts against gold, the Aussie and the Rand. They keep marginal production going as an excuse to speculate. I posted the example of Centaur here recently, and that's an example of the worst.

The point is they will not have the luxury of additional hedging when these shorts go against them. The Aust. producers in particular are enamored with selling long dated naked calls, usually close to the money strike prices. They just milk dry cows for all they are worth. Subjection to delta hedging on currency and gold strength will be more than just a little interesting. A little pop in both simultaneously could put these producers in a world of hurt.
Message 15423383

Last June, I analyzed several of these companies. I have glanced at the more recent hedge positions and to be honest, they look even worse. So the info in these posts is a little dated, but I think you will get my point. Start here and just move to my next posts:
Message 13842194
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