steady state, page-8

I have been thinking a bit overnight about the hedging rates that INL management may or may not have locked into and wondering why they didn't actually elaborate on that point, as it would give investors a bit more of a clue on potential value.

It was some time ago that they started talking about hedging their forward production.

I pretty much have a quick look at metal prices most nights and if I remember rightly Zinc was trading for about US $1.30 - $1.35 per lb when they started talking about hedging.

Now that's a fair bit off current prices but if we hedged close to that mark it would have been a good deal at that time, especially considering INL had factored in only 90c per lb as their base case for financial analysis. Compared to todays prices for Zinc, hedging at $1.30 or even slightly less might disappoint some overly optimistic shareholders but my gut feel is that is about as good as they have probably done. On the positive side we are still fully exposed to any further upward price movements and indicative economics of the HZCP are very robust to say the least, all things considered.

My only negative comment is that I would have preferred for management to have disclosed the hedging rate, in what is otherwise was a brilliant report.

Cheers
Boomer