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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (29644)	2/9/2002 8:44:08 AM
From: Louis V. Lambrecht	Respond to of 52237

Iso - ouch! Did not took note as this seemed the natural thing to do. If the price of gold was to rise, switching your hedges would mean trading high cost paper promises for even higher cost paper. In bookkeeping = a loss. Whereas delivering the physical at real Dollar cost (or real Rand cost for that matter) would reduce your attributable volume (bad for the top line) but increase your profits in the books: high cost paper less lower real cash cost (good for the bottom line). Doing so would eventually increase the total costs per ounce sold, but who would care if the realized prices gets out of hand? Will keep searching for for some links this weekend tho. Miners have a way out of their forward sales, just have to dig a little harder. What about bullion banks or other shorters?

To: isopatch who wrote (29644)	2/9/2002 9:03:56 AM
From: Louis V. Lambrecht	Read Replies (1) \| Respond to of 52237

OK, got one link for AngloGold: >AngloGold scales back Rand hedging By: David McKay & Laura Clancy Posted: 2002/01/31 Thu 20:00 ZE2 \| © Miningweb 1997-2002 JOHANNESBURG – AngloGold today (31 January) confirmed it had made a fundamental shift in its attitude to gold hedging declaring its intention to further haul in the rand component of its forward contracts and reduce its overall hedge position. In practice this has meant not adding to the hedge book while simultaneously delivering into its positions. For instance, the group's rand forward positions last year totalled about 38 000 kilograms compared to only 20 000 kilograms in 2002. Overall, AngloGold's rand forward position has been reduced to 103 000 kilograms from 125 000 kilograms previously. Total rand priced hedges will amount to 125 tons or 27 percent of the total hedge. mips1.net (btw, look at the end of the doc for Heinz Blasnick's comment <g>) If memory serves, the NEM side was a comment of Pierre Lassonde (next CEO of the merged NEM), probably cited by Tom Calandra. ( cbsmarketwatch.com ) Those comments are posterior to Jan 31. EDIT: yet another one mips1.net AngloGold joined Normandy, Australia's biggest producer, in reducing forward sales as they bet gold prices may rise on a drop in supply.

To: isopatch who wrote (29644)	2/9/2002 10:07:17 AM
From: Louis V. Lambrecht	Respond to of 52237

And this weeks Bearon's <iFoster and de Vaulx agree that their funds are lucrative because they concentrate on mining companies that don't hedge forward production. With U.S. interest rates at 40-year lows, the contango in gold -- the premium that forward-dated contracts command over nearby ones -- has been pushed to almost zero, making it unprofitable for producers to hedge their forward production. Now, for the first time in a decade, producers plan to turn profits by betting on higher prices instead of lower ones. Perhaps the best example of such a reversal is Anglogold, which announced its intention to reduce its hedge book by an additional 4.5 million ounces in 2002 and not establish new hedge positions. Producers' greater commitment to the long term may inspire confidence in the institutional investor community more than price spikes alone. Will such confidence prove sufficient to keep gold trading around $300? It's anybody's guess. online.wsj.com