Ann: FY16 Financial Results Presentation-EVN.AX, page-23

The hedging is $1624, but it's just about being prudent. The downside for miners when the GP falls is far greater than the upside when the GP rises. If you are forced to raise capital on unfavourable we all get diluted. Remember 12 months ago EVN had taken on a serious amount of debt and there was risk associated with that debt. It was only prudent to get some hedging in place so the company could be sure of paying off the debt. Now they are 15 months ahead with the debt repayments and the PoG is excellent (and looking to go higher still in my view) they will be able to be more aggressive and hedge less. We might not like having 700koz hedged at $1624 when the GP is A$1750, but think what that hedging allowed. It allowed EVN to swallow an asset the size of Cowal without risking choking. Can you imagine what a step forward it is when you are running assets like Cracow and Pajingo to swallow something the size of Cowal? Think python swallows crocodile. The hedging will be run off in 3 years, but Cowal will still be producing in 50 years.

The PXG assets are about securing long term feed for the Mungari plant. They are hard at working drilling these assets to prove up reserves. And that is what will turn Mungari into another Cowal.

Two tier 1 assets. Debt paid off with a year. Where is the next tier 1 asset coming from? That's the question.

Cheers,
Tim.