details of hedging - weep....., page-12

re: jembsb is correct Well I guess we can all be right until we know the final mix of what is sold inline with their hedges and what is sold to the spot market. If you follow their 1/2 yearly report and assume full year production and assume they will deliver into all their hedges as outlined in that report ( ie 52000 Ounces gold when their nameplate capacity is 50000 ounces @ 403, Cu 3100 Tonnes @ 0.9 cents per pound, Zn 4200 Tonnes @ 0.44 cents per pound, Ag 493K ounces @ 4.93 per ounce) and the balance is at todays spot rate ( gold has no balance). Assuming following Gross cash costs
Cu - 0.8, Zn 0.4, Au - 250 , Ag - 4. I get gross Cash flow of 95 Million AUD or about 9 cents per share on 800M shares ( doesn't include CN conversion). I guess it will not be untill 2007 that you will see these numbers. I also fear that their bankers will allow them to roll over hedges until 2007 to maximise 2006 cash but don't forget that if they rolled every thing over it will not be free ( how much uncertain) and 2007 would have 96K ounces of gold at 405 USD per ounce. What will their bankers say if gold keeps going up over longer term ( market sentiment and mine would suggest this is likely ). I hope the other metals come back but Au, Ag may be on a different tract. So while 2006 cash flow may be maximised due to rolling over hedges , 2007 may be worse due to this change.

Personally I believe there are better less hedged /unhedged producers out there.