remember that they are paying off the hedges and taking a loss up front, bringing losses forwards, which is normally a bad practice. the gamble is that gold will continue to rise, so the wisdom of this decision will take time to be seen. Meanwhile by issuing shares at $2.30 they are effectively receiving 70c cash for each $1 value of shares. hence it is expensive indeed to pay off the hedges in this way. if they borrowed from the bank it would be a much better deal. this way the value must fall by at least 6% of the capitalization purely due to the discount on the issue. Granted that makes for a sp around $3, but the market will take a while to see if the pog continues on its merry way. a correction in gold would be a disaster at this point in time. in any case, strong nerves will be required for the next few months, valium on standby............
LHG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
