NORTHGATE EXPL (NGX.TO) Message Board

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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO)

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To: loantech who wrote (19)	6/6/2002 8:12:48 PM
From: John Dally	Read Replies (1) of 158

"Are you saying they still have the committment to deliver the 820,000 ounces of gold at $300.00 after today's news??" Dear Tom, No, the 400,000 oz SHORT call position is due this quarter. I would assume that they will use the proceeds of the equity financing to close it out, if they haven't done so already. (They are raising $US55m and they will probably pay less than $US10m to close out this position.) I was just looking at it the way it would have looked when they committed to these positions . . . Fortunately for NGX, their share price is increasing at a faster rate than the POG and their derivatives liability. Given today's environment, I don't think that NGX is a bad investment. It's just that I was a bit surprised when I read the last paragraph of their Q1 earnings report. I think precious metal cos are now being valued based on reserves, not cash flow. Cash flow was critical when the POG kept declining and many cos were in danger of running out of cash. Today that is no longer a danger, if you need cash, just sell more paper! Best regards, John.

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