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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: maxncompany who wrote (961)	1/26/2006 8:00:07 PM
From: Condor	Read Replies (2) \| Respond to of 3270

If Yukon is talking about hedging it's probably a requirement by the banks that will finance the opening of their mine. Trouble with that is, it limits the upside and investors don't like that. EPM.t experience contradicts you as does YZC action today. The following news release was made when EPM traded at .74 It trades at $ 1.15 today up over 50 %. C ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ European Minerals hedges gold at Varvarinskoye project 2005-12-06 05:35 ET - News Release Mr. Anthony Williams reports EUROPEAN MINERALS CORPORATION HEDGES 443,000 OUNCES OF GOLD AT US$574.25 PER OUNCE European Minerals Corp. has completed the execution of its gold hedging program which is a condition of drawdown of the $75.4-million (U.S.) debt facility concluded with Investec Bank (U.K.) Ltd., Investec Bank Ltd. and Nedbank Ltd. for its 100-per-cent-owned Varvarinskoye project (see news issued in Stockwatch dated Dec. 1, 2005). The company expects to commence drawdown of the loan during January, 2006. EMC has implemented a gold hedging facility in the form of a monthly United States dollar flat forward gold sale for the eight-year term of the debt facility. EMC has sold 443,000 ounces of gold and has locked in a guaranteed price of $574.25 (U.S.) per ounce for the whole period. The gold hedging facility is unmargined and deliveries of gold into the hedge are scheduled to commence in the first quarter of 2007. The 443,000 ounces hedged represents 50 per cent of the gold production during the term of the debt facility, but only 19 per cent of Varvarinskoye's current proven and probable mineral reserves of 2.34 million ounces of gold (this estimate of gold reserves was calculated at a gold price of $375 (U.S.) per ounce). Varvarinskoye also has current proven and probable mineral reserves of 269 million pounds of copper (this estimate of copper reserves was calculated at a copper price of $1 (U.S.) per pound). In addition to an average production rate of 145,000 ounces of gold per year over the first 10 years of the project's life, the Varvarinskoye project will also produce approximately 18.4 million pounds of copper per year in concentrates over the same period (see news issued in Stockwatch dated Dec. 1, 2005). EMC will make a decision in 2006 regarding a possible copper hedging program. All estimates of mineral reserves and rates of production are contained in the technical report entitled, "Varvarinskoye Gold-Copper Project Northern Kazakhstan," dated November, 2004, and amended March, 2005, prepared in accordance with Canadian National Instrument 43-101 and filed on SEDAR on March 31, 2005. Tony Williams, chairman of EMC, commented today: "The completion of the gold hedging program represents yet another major achievement for the company and completely underpins repayment of the debt facility. The current strength of the gold market has enabled us to achieve an unmargined guaranteed gold price for 443,000 ounces of production at a price that is nearly $200 (U.S.) per ounce higher than the gold price used in the financial model contained in the technical report that was filed on SEDAR on March 31, 2005. "With over 80 per cent of the current proven and probable gold reserves remaining unhedged, given the current gold market, there is substantial potential upside for our shareholders. In addition, if copper prices remain at current levels this will further enhance the economics of the project and establish Varvarinskoye as a significant gold/copper mine. "If project cash flow permits there are provisions within the debt facility to make early repayment of the project debt. "Finally, as Varvarinskoye's mineral reserves were calculated at metal prices of $375 (U.S.) per ounce for gold and $1 (U.S.) per pound for copper, a recalculation of reserves will be undertaken in the new year to reflect current metal prices." We seek Safe Harbor.