I understand and respect that different people will necessarily...

I understand and respect that different people will necessarily have different views about hedging. For my part, I see no benefit in hedging voluntarily in an environment where (for a range of reasons) the price of gold is likely to continue to rise significantly.

I set out my concerns about NST’s hedging policy in a number of posts on the thread relating to NST’s most recent quarterly results. I will therefore resist the temptation to repeat them here.

There is one additional concern I have about hedging which I don’t think anyone has mentioned here yet. To the extent that NST is hedging voluntarily, as opposed to hedging as a condition of finance, the hedging will obviously result in NST’s profit being materially less than it would have been had it sold all of its production at a higher spot price. However, if we experience a period of hyper-inflation during the term of the hedging program, it is conceivable that NST’s costs of production will exceed the hedging price. In that event, it will not be a case of NST’s profit being reduced, it will be a case of NST incurring a loss on the sales made under the hedging program. It is very disconcerting to me that a company with NST’s financial strength may have put itself voluntarily in that position.

I have more than a truckload of shares in NST which I have accumulated over the last decade. I am obviously keen to see the company prosper, as I am sure we all are. Unfortunately, I think the company has let itself and its shareholders down badly with its hedging policy.