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Gold/Mining/Energy : William Resources - WIM-TSE -- Ignore unavailable to you. Want to Upgrade?

To: Lalit Jain who wrote (926)	2/12/1998 8:41:00 PM
From: gmweber	Read Replies (2) \| Respond to of 1326

Lalit Jain Another hedge closed out. The big question is: why has Barrick not closed out its hedge?? Gold and silver hedge positions being restructured TVX Gold Inc TVX Shares issued 162,782,838 Feb 11 close $3.95 Thu 12 Feb 98 News Release Mr Eike Batista reports The company is in the final stages of substantially restructuring its gold and silver hedge positions and expects to realize about US$70 million net in cash when completed. The company is monetizing the gains on the majority of its gold position and is reducing its silver exposure. Cash proceeds are being banked and will provide further flexibility for future developments. TVX put together most of its gold and silver hedge position before September 1997 because it was bearish on both metals. Now it is the company's view that gold has bottomed out, and it makes sense to cash out the gold position. Conversely, the disclosure that Warren Buffett's Berkshire Hathaway Inc has bought 130 million ounces of silver over the last six months has changed the price-risk profile of the silver market. In light of these changing market conditions, TVX continues to take action to reduce the net number of silver call options it sold last year to finance put options. TVX is a gold mining company with significant silver production. Over 20 million ounces of silver (TVX's share) will be produced at the La Coipa gold/silver joint venture in Chile during the next two years. The company's share of La Coipa silver reserves at year end 1996 totalled over 100 million ounces. In addition, TVX has more than 50 million ounces in silver resources. The major portion of these resources will be upgraded to reserves in 1998 on completion of the Olympias feasibility study. Olympias is a gold/silver project in Greece. As at December 31 1997 TVX's seven-year gold floor hedge position totalled nearly 2.2 million ounces of forward sales and put options at an average price of US$405 an ounce. The position also included call options on 1.4 million ounces at $433. The gold forward sales, puts and calls have been cashed out, being replaced with 1.0 million ounces of put options at US$280. These puts will provide a floor price for about 60% of gold production over the next five years. At year end 1997, the seven-year silver position totalled 34.2 million ounces of forward sales and puts at an average of US$6.25, plus calls sold on 59.8 million ounces at US$6.67. The company has now reduced its net exposure to calls to 22 million ounces. Operating cash flow for 1998 was previously forecast at US$64 million, based on US$300 gold and US$5.30 silver prices. As a result of this restructuring, it is now forecast at approximately US$115 million. TVX has sufficient tax pools to shelter the gains from tax. TVX is a precious metals growth company. Planned gold equivalent production will increase by 25% in 1998 to 510,000 ounces (372,000 ounces of gold and 7.8 million ounces of silver) at a cash operating cost of US$200 per ounce. Production is expected to double and costs per ounce decrease further when the Olympias and Skouries projects in Greece come into production in 2001. WARNING: The company relies on litigation protection for "forward-looking" statements. (c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com regards gmweber