norton cheapest gold producer in the world, page-13

TestPilot

The share prices for most goldies I follow are not rising because the exchange rate movement is lowering the AUD POG, and hence profits are lower.

As regards the convertible notes, there is no issue there. They are due to be repaid 3 years time, not one, ie by 30 June 2012. NGF are ramping up production so they can add to their $45 million in retained profits to cover the $38 million in CNs.

In relation to the hedge, several steps need to be met before that is an issue. If Lehman were to come out of Chapter 11 bankruptcy and if they were entitled to receive money for the hedge then NGF would need to use a portion of its $45 millon in retained earnings to pay for the period from 19 September 2008. NGF do not have to make payment to clear the hedge, unless a court of law so determines, and there are a range of reasons why it is not likely to get to that stage.

Lehman has some $USD23 billion in hedges and NGF's hedge and many parties on the other side of the hedge will be contesting any adverse court ruling, not just NGF. The hedge continues in place until 30 June 2012 and there is no basis for your assertion that it will need to be paid out next year. NGF is able to set funds aside from its profits for the hedge.

Share dilution is not an issue. The only share dilution is from the exercise of options and converion of the CNs. This would significantly add to NGF's cash holdings.

In short there is no need to try and scare investors. Keep to the subject that matters most, the AUD POG. NGF is still making profits, and is expanding production in order to fund its future liabilities, including CNs and a possible future buy out of the hedge.

loki