** hedging is now a serious issue, page-9

Parrot this statement you made
"Suppose a company has 200,000 ounces of future production hedged at US$350 and gold jumps to US$600 next year. The company has to declare a loss of US$50 million from this hedge position.

This could mean the company is in breach of its loan arrangements with the bank and so the bank can acquire the company's gold mine.

It's that simple. "
I dont think its quite that simple!
I would have thought there is no loss to declare on the companies hedge position if the POG went up, unless that was written into the hedging contract to allow the hedged company a lower hediging cost. Would it not depend on the type of hedge position taken out to as there are many forms if I am not mistaken