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Gold/Mining/Energy : Gold and Silver Mining Stocks
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To: Davy Crockett who wrote (672)4/4/2001 8:51:03 AM
From: que seria  Read Replies (1) of 4051
 
By leverage I meant the benefits to Normandy of costs in a depreciating currency and prices received in an appreciating currency. In this context leverage = currency trend juicing up operating profits from mining (if any). If the US and Australian dollars reverse their trends, the same leverage works against Normandy, as it would then have its costs paid in a currency worth more and income received in a currency worth less. Over time that has added up for Aus producers.

I haven't looked at Normandy's filings to see how it gets paid for its hedging, but being an Australian company with Australian operations I'm assuming it converts any greenbacks it received into the Aus dollar. If I were buying I'd want to know.

I'm not saying the almighty buck will remain so, just that for now and perhaps the intermediate term it is so.
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