Ann: Quarterly Activities Report, page-7

Hi Isladar, don't be too concerned about the hedges. The only real risk if they cant deliver into the hedges.

I am tracking the hedge position and the quarterly sales.

For June Quarter and the full year I estimate the following:



My estimate of the position of the mark to market of the gold hedged to spot, is a loss of $357m.

What most people fail to realise is that, this wont be taken through the P&L in one year or quarter. It will be taken over a period of time depending on
factors set out in the quarterly report.

I think what people may not understand, is that the offset to this loss on the hedges, is the gain in value of the gold in the ground.

The resources and reserves don't appear in the balance sheet except as an exploration cost. It doesn't take into account the increase in value of the gold once mined, to $2,600 per oz at current prices. If the reserve of 8,000,000 oz were revalued by say $1,000 it would be a revaluation of $8b. So the current apparent hedge loss is insignificant.

I hope this allays some of your fears re the hedging position..

I am sure the CFO and board are reviewing the current situation, contemplating delivering into more of the lower priced contracts and hedging more gold at $2,600, to protect future earnings should Gold fall in price. Also taking other factors into account, such as capital requirements. Time will tell.

The above contains estimates, but I believe the model is fairly accurate based on past performance.

GLTA

DYOR