Companies reduce hedge positions
Source: Mining Engineering
Publication date: 2002-03-01
Arrival time: 2002-04-03
Gold's return as an investment choice has been spurred by the announcements by several large mining companies that they will reduce their hedge positions. Potential investors were pleased to hear that.
And some analysts believe that will help gold maintain its new- found strength.
Newmont Mining is a traditional nonhedger. In February, Newmont said that it would eliminate all of its hedge book once it completes its acquisition of Normandy Mining. That would amount to about 218 t (7 million oz). In addition, Newmont closed out Battle Mountain Gold's 8.5 t (275,000 oz) hedge book. Meanwhile, Normandy announced that it had reduced its hedge book by 11.6% to 308 t (9.9 million oz).
In January 2002, AngloGold said it had reduced its hedge position by 20%, to 388.8 t (12.5 million oz). The company later announced that it would further reduce its hedge book by another 20% to about 311 t (10 million oz).
South Africa's Goldfields plans to eliminate the 13 t (420,000 oz) of hedged gold it acquired when it increased its ownership in Abosso Goldfields in Ghana. And Newcrest Mining, of Australia, cut its hedge position by 6 t (193,000 oz).
Late last year, South Africa's Roodepoort Deep announced that it would change its strategy to becoming an unhedged gold producer.
Copyright Society for Mining, Metallurgy, and Exploration, Inc. Mar 2002
Publication date: 2002-03-01
© 2002, YellowBrix, Inc.
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