chart is looking for a break out , page-12

Dr_cash

See previous posts discussing the application of the hedge on the NGF thread, especially by poster BH a couple or so months ago.

I am not sure if you are correct about them being cashflow negative in the event the hedge was working as they are setting money aside for the hedge. I think some of the outlay last quarter was for the development of a new mine.

In any case the hedge is for 70,000 ounces and expires 30 June 2012 (3 years time). A small new mine currently being developed at Paddington in WA is forcast to produce 60,000 ounces pa for about three years at a cost of about $AUD800/ ounce starting end 2009. Have a look at the NGF website for confirmation on this. In effect this operation will almost fully offset the hedge.

A rising AUD is a worry, especially as there is no certainty that the USD price of gold will not fall. If you feel too uncomfortable with this risk, I suggest you sell out. It is something I am prepared to live with, but I agree it does not feel that great to see the AUD POG struggling to stay above $1120-1140.

loki