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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO) -- Ignore unavailable to you. Want to Upgrade?

To: peter snowdon who wrote (9)	6/6/2002 12:15:17 PM
From: John Dally	Read Replies (1) \| Respond to of 158

I think that the "spot deferred contracts" would have been required for loans, but I would not expect a gold call option short position to be required for a loan. (I haven't tried to find out, so I don't know.) I think that since we're in a rising gold market, investors will care less and less about cash flow and more and more about the value of reserves in the ground. Companies are now able to overcome cash flow problems through share sales. Therefore, these types of issues are probably fading as investor concerns. I don't think that NGX is a bad investment, it just surprised me to see that they had such a sizable short term liability.

To: peter snowdon who wrote (9)	6/6/2002 12:16:00 PM
From: tyc:>	Respond to of 158

>>i'm not sure a hedging position is an 'operating blunder' I agree with you completely. The company was faced with a debt of US$100,000,000. In the face of a volatile gold market that was something to be concerned about. The hedging requirement was for a million oz, one third of their reserves, but it would very neatly have allayed the worry of the debt. Frankly, I would have preferred this arrangement to the dilution implied by the new equity issue. The big plus, however, is the elimination by conversion of the preferred shares. I like that !