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Gold/Mining/Energy : Gold and Silver Mining Stocks

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To: baystock who wrote (1753)	7/27/2001 4:46:04 PM
From: russwinter	Read Replies (1) of 4051

<Are forward sales @ $340 an asset> It's more a successful trade (and shouldn't be confused with mine costs)than an asset, and one that can be easily captured. For example if a company has a two year plain vanilla forward sale it would be trading today at about $277 in the futures market. All the company would have to do is purchase at that price, close out the hedge, and take the profit (340-277= 63/oz). There is no need to just deliver gold as time goes on. If POG were completely stable that future in a year would be $271, only a $6 additional gain. Is that tiny gain worth giving up the upside? It is interesting to see more than a few companies closing out these positions as second quarter results are reported.

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