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Gold/Mining/Energy : Gold Reserves Limited GLR - TSE
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To: The Vet who wrote (371)7/10/2002 10:24:15 AM
From: Valuepro  Read Replies (1) of 406
 
OT "They have one of the worst hedge books around (if not the worst)."

A common misconception. I've spoken with the company - both Richard Marshall and Marc Oppenheimer - on this.

1) Almost all of the hedging is done at the requested of Standard Bank of London as security for loans, not as an intentional means for KRY to lock in gold prices.

2) Unlike other hedging programs, and because this is really Standard Bank's program, it can rolled forward. In other words, as the price of gold rises, these contracts can be rewritten at higher prices.

3) Unlike almost all other hedging programs in the industry, KYS's contracts are on 5-years terms when the standard is 15.

4) Going into the future, far less new hedging will be done.

5) As production increases, hedging will become a lesser proportion of production.

6) As a percent of reserves, KRY's hedging is far less than that of major producers.

Just thought you'd like to know.

Cheers,

VP
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