NORTHGATE EXPL (NGX.TO) Message Board

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

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To: tyc:> who wrote (68)	6/26/2002 11:24:33 AM
From: tyc:>	Read Replies (1) of 158

Yes ! Another aspect of NGX's hedging that is worthy of consideration is its currency hedging. I surmise the thinking is "What's the use of hedging gold in terms of American Dollars, when those American Dollars might fall in value". I quote from Note 17 of the annual report. ".....At December 31,2001, ..... had entered into contracts to sell $72Million ....at an average exchange rate of Cdn$1.53...." ".... The unrealised loss on these foreign exchange contracts was approximately $2.9 Million at December 31,2001". It seems to me that if the US$ has been forward sold to provide $1.53 Canadian, that hedge is now in the black, for a US$ today is worth only $1.51 Canadian. As the US$ falls in value, the Cdn $ approaches parity and the hedge becomes increasingly profitable. Does anyone have a contrary view ?

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