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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Zardoz who wrote (6923)	7/30/1999 1:24:00 PM
From: jgibbs	Read Replies (1) \| Respond to of 82076

Hutch and others, As you probably know, Cambior is another mining company that hedges its gold production. With the amount of money to be made from hedging, it seems hard to fault them for doing so. I still for the life of me cannot figure who would pay so much more for forward delivery. Who would pay such high premiums? Wouldn't it pay buyers to wait or at least offer less, especially in this market? How much does "amortization of deferred earnings generated by the conversion of gold loan hedge positions" play in the scheme of things? <<MONTREAL--(BUSINESS WIRE)--July 30, 1999--Cambior Inc. (ME:CBJ. - news; TSE:CBJ. - news; AMEX:CBJ - news) reports second quarter 1999 results with revenues of $80 million (All amounts in US dollars). (snip) MARKETS AND HEDGING PROGRAMS Cambior's successful hedging program continued to attenuate the negative impact of the weak gold market. During the second quarter of 1999, Cambior realized an average price of $370 per ounce, representing a premium of $97 per ounce over the average market price of $273 per ounce. For the first half of the year the average realized price was $366 per ounce, a premium of $86 over the average market price. As of June 30, 1999, the gold hedging program had positions ensuring an average price of $350 per ounce for 1.3 million ounces of gold. This program assures full coverage of the remaining gold production for 1999 at $364 per ounce and 80 percent of the production exposure for 2000 at $322 per ounce. This realized price will be achieved with the benefit of the hedge positions on the forward sale of gold production and the amortization of deferred earnings generated by the conversion of gold loan hedge positions. At quarter end, the estimated value of the mark to market position of the gold hedging program amounted to $72 million.>> biz.yahoo.com