Ann: Quarterly Activities Report, page-11

Hi Champkan, I agree with everything you have said. Hedges are to protect for the fall in the gold price.

My first sentence to Isladar was:' the accounting standards don't require RRL to book the loss of the mark to market loss of $167,000,000.

I agree that management acted correctly in not selling all the gold in the 3rd Quarter, if the price of gold was low. This will set the company up for a great last quarter at current gold prices.

My suggestion was that they deliver into some of the lower priced hedges and enter into more hedges at current prices. This will ensure higher margins for longer, and as you suggest, will protect against a fall in the gold price. I would hedge at current prices, such that the overall hedged value for gold moves to A$2,000 per oz.

It also takes into account higher anticipated production volumes next year.

I am sure they are looking at this every day and working on the price strategy going forward.

I think the company needs to assist industry analysts in understanding how the hedging works, as the feedback I receive, is that they think the apparent difference between spot prices and the hedged value will be market to market in the current year, which is incorrect.

GLTA

DYOR