Ann: Charters Towers Update , page-52

However much people want to criticise CTO Management, I think one thing is pretty clear. CTO Management have done the right thing by refusing to hedge.

If CTO Management had hedged their gold production for some years ahead at a fixed price then CTO's shareholders would probably have lost everything with the banksters taking control.

I have no doubt that when gold explodes the hedge books will come back to bite the many juniors that have hedged.

In the "lucky" cases, depending on the fine print of their hedging agreement, it will only be because of substantially reduced cash flow - and life may continue as normal with the cash flow positive company delivering say its US$1075 hedged gold with gold at US$2000 plus and probably feeling like an absolute fool and wondering why its share price is not exploding like many unhedged gold producers and explorers.

In other cases, even though the company is cash flow positive, a massive mark to market accounting loss could put it in breach of its finance arrangement with the banksters and seriously threaten the very existence of the company.