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Gold/Mining/Energy : GOLD-XAU -- Ignore unavailable to you. Want to Upgrade?

To: Bucky Katt who wrote (1069)	1/11/1998 11:46:00 AM
From: Janice Shell	Read Replies (1) \| Respond to of 1756

And... Pegasus Gold Closes Hedge Book SPOKANE, Wash.--(BUSINESS WIRE)--Jan. 9, 1998--Pegasus Gold Inc. (PGU: AMEX, TSE, ME) announced that the lenders under the Company's revolving credit facility have notified Pegasus that they consider all amounts payable under the credit facility accelerated, although they have not yet demanded repayment. ''After consultation with counsel, we have informed our lenders that we disagree with their interpretation of the revolving credit agreement and have reserved our rights concerning their actions,'' said Werner G. Nennecker, President and Chief Executive Officer. Under the Company's convertible subordinated notes, acceleration of the revolving credit indebtedness would constitute an event of default. The Company disagrees that its revolving credit indebtedness is accelerated, due and payable. In addition, over the past several weeks the majority of the Company's gold and other hedge contracts, including foreign exchange contracts, have been closed out. The repurchase of the gold hedges generated a gain of approximately $74.5 million. Pegasus still has forward contracts on 48,000 ounces of gold for delivery in 1998 at an average realized price of $524 per ounce. The remaining gold hedge position has a mark-to-market value of approximately $10.8 million at a gold price of $285 per ounce. The termination of the Australian dollar hedges generated a loss of approximately $18.6 million. The lenders have notified the Company that they have exercised their right to set-off proceeds of approximately $58 million from the termination of gold contracts against foreign currency losses of $2.4 million and the balance against amounts owing under the revolving credit facility. The remaining foreign currency losses of $16.2 million have not been settled with the financial institutions.... Granted, PGU isn't one of the major XAU components (to say the very least), but to me this doesn't look like good news for the mining industry in general...