Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: maxncompany who wrote (10584)	5/5/2006 11:15:53 AM
From: LLCF	Read Replies (4) of 78421

Well, look at all the other stuff in that article... the guy is clearly a buffoon. He's assuming the lenders are buying the hedges and sitting on them and he accounts for "returns" on those hedges as "interest"??? Clearly totally disconnected from reality. That said, the article brings about a point (not on purpose.... ie. he MISSES the main point) I made earlier about EPM and others which is: 1.) The banks make you hedge a portion of future production in order to give you the loan & 2.) The banks make YOU bear the country risk and extraction cost risk and probably all other risks one can dream up! (as far as I know), therefore: 3.) Theoretically if all the price risk of the mine's production is taken away (ie. if all the production was hedged) you essentially have on big play on country risk and extraction risk left in your stock price. Your stock turns into a fixed income security payable $US (since the loan and hedge are in $US) with imbedded production and country (political) risks. DAK

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