Hi Isladar, the accounting standards don't require RRL to book...

Hi Isladar, the accounting standards don't require RRL to book the loss of the mark to market loss of $167,000,000.

They are delivering 10,000 oz per quarter per the announcement. They will book a lower price on 10,000 oz of sales each quarter, which equates to say $10,000,000 in the quarter. Rough estimate.The other 157,000 will be sold in future periods, unless they change strategy.

"As previously noted, Regis’ current strategy is to deliver into the lowest priced contracts at the
rate of at least 10,000 ozs per quarter. The average price of gold sold by Regis for the reporting
period was $2,297/oz compared to the average spot price for the March quarter of $2,410/oz.
This quantifies the impact on revenue of delivering into the hedges at the rate noted for the
quarter was less than 5%."

I would like to see RRL deliver at least 30,000 oz per quarter while prices are high. Take the lower prices on the 30,000 oz while margins on the unhedged portion are very high. Then enter into more forward sales at the higher prices, such as $2,600. This would lock in higher prices for longer and roll off the lower priced hedges. In other words, expediate the rolling off of the lower priced hedges, so future periods aren't hit by these lower priced hedges.It will depend on cash flows though, as closing the position will require cash.

There are ways around this though, by doing what Oceana Gold did and presell gold for cash, if that is what required. Hopefully it wont be at what Oceana did at $1,635.

Having said that, everyone has there own views around gold hedging and positions.

"OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the “Company”) is pleased to announce
that it has entered into a forward gold sale arrangement with the support of members of the Company’s
current banking group whereby the Company will receive a pre-payment of $78.5 million (approximately
$1,635 per ounce) on February 28, 2020, in exchange for delivering 48,000 gold ounces between September
and December 2020. The advanced gold ounces sold represents just over 30% of expected gold production
across that period and 13% of the Company’s total 2020 full year production."

We will see what the company does. There are some very talented people at RRL, who I am sure are reviewing this every day. It a crucial part of the core business. Gold sales.

DYOR

GLTA