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Gold/Mining/Energy : DROOY Durban Deep- Best S. African Mine -- Ignore unavailable to you. Want to Upgrade?

To: Debt Free who wrote (483)	3/7/2000 1:05:00 PM
From: baystock	Read Replies (1) \| Respond to of 851

I don't have the numbers at the top of my head, but it is around 35% of production for the next few years. It would be best to read their financial reports.

To: Debt Free who wrote (483)	3/13/2000 8:55:00 PM
From: baystock	Read Replies (1) \| Respond to of 851

Saw this post on Gold-Eagle today of some correspondence between DROOY and a shareholder. Has anyone heard before that DROOY was hoping to bring their cash cost down to $220 an oz ? This is the first I have heard of this, but if they were to achieve this, it would be very significant IMO: Durban on reducing their Hedge Position & see product costs = $220US: (Orca) Mar 13, 17:43 My request to Durban: ....... With the recent declines in the price of gold, EVERY OPPORTUNITY like this dip should be taken TO COVER MORE HEDGES. This, in my estimation, is a better investment strategy than more in ground assets, not that those are not of value. But the hedge continues to carry downside risk. With the recent increase in announcements that end mining co. hedging, the sentiment will flow to those that more and more aggressively take that step. I also suspect that the bullion dealers are using every dip to unwind themselves as much as possible. I recommend that DROOY do the same. Durban's response: Durban Roodepoort Deep, Limited agrees with your views on hedging. As mentioned in January 2000 by Mr Mike Prinsloo (CEO) at the December Quarterly presentation, we are utilising every opportunity (when the gold price dips) to reduce our hedge book where it makes commercial sense. It is our objective that through delivery in terms of our contracts and buying back of positions when the conditions suit that our forward book will reduce significantly over the next year. The objective of DRDs hedge book is to protect the business while restructuring, protect marginal ounces and to protect capital projects. The hedge book is structured such that a large portion of DRD production in any year participates with spot. DRDs received gold price will always be geared to movements in the spot gold price. If we go to the other extreme of a period of a lower gold price (when hedged gold producers rely on their hedge book to protect the business) DRDs hedge prices are at levels that are in excess of cash cost of production. In summary DRD's hedge book is structured to protect the business and to ensure positive cash generation in periods of ?low? gold price; while at the same time allowing a large portion of production to participate with any significant gold rally and allow the natural gearing DRD has always had to upward movements in the spot gold price. With the acquisition of Harties and the full benefit of the Blyvoor 2000 project coming through, DRD's cash costs of production are forecast to reduce to US$220/oz over the 5 year period of the hedge book. DRD's forward prices have been structured so that they are at levels that are in excess of these cash cost of production. The objective of DRD's hedge book is to protect the business while restructuring, protect marginal ounces and to protect capital projects. The bottom line is that the existing forward book will ensure that DRD remains cashflow positive, irrespective of gold price.