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Gold/Mining/Energy : Gold and Silver Mining Stocks

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To: Frank Pembleton who wrote (1353)	6/11/2001 1:57:26 PM
From: goldsheet	Read Replies (1) of 4051

> some mining companies use hedging as a way of financing a new operation Gold loans are a great financing tool, and I'm not even sure I would call them hedging. They are VERY different from forward sales, calls, puts, etc... I recently wrote about a $25M gold loan that Canyon Resources received in 1995 to finance the Briggs mine monetized at $388. When gold prices dropped they were able to pay off the loan early using cheaper gold, and actually ended up with a $3m gain. It gold had gone up, the loan would have looked more like a forward sale at $388. Harmony is so anti-hedging they are bragging they borrowed $US150 at 13.6% interest for 5 years (instead of a forward sale). I hope thay buy something with the money that returns at hell of lot more than 13.6% The old Anglogold properties they recently acquired might not have such good returns.

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