Wheaton River Minerals (WRM Toronto) Message Board

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Gold/Mining/Energy : Wheaton River Minerals (WRM Toronto)

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To: Steve Johnston who wrote (79)	7/9/1997 11:21:00 PM
From: Robert Swaita	of 350

Hi Steve: I did a little searching myself and discovered that WRM has sold forward 177,000 ounces of gold at US$379. I think your strategy of "flipping gold bought on the open market" is viable. This will certainly be profitable depending on the strategy they used. Some companies will sell their gold forward then buy Call Options to protect themselves from potential profit being lost if the gold price increases. Therefore if WRM sold their gold forward and also bought Call options, in order for your flipping strategy to work, the difference in what they sold it for and what they buy it at should be greater than the cost of the Call Options. As it stands now, Feb. 1999 gold is at about US$345 and they sold it for US$379 for a difference of US$34 per ounce. Then we consider that they sold 177,000 ounces at US$34 = US$618,000. In other words they can stand to make about US$600,000. If WRM does decide to flip, they should hope that the price of gold will increase by September when their first gold pour starts for it to be profitable. Because if the price of gold continues to decrease they will be forced to sell forward at lower prices!

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