NORTHGATE EXPL (NGX.TO) Message Board

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

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To: russet who wrote (30)	6/7/2002 8:27:54 AM
From: John Dally	Read Replies (2) of 158

russett, There is nothing wrong with hedging, however, if gold is in a bull market, then the cos with the hedges will not enjoy the cash flow they could have. Also, your math is wrong: NGX can buy all the gold it wants today at $326, but is obliged to deliver 400,000 oz at $301. The cost to NGX is $25 / oz x 400,000 oz = $10m. They can easily close out the entire position with the $US55m they raise. As I have already said, I would value this co based on reserves & resources. John.

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