91,952 ounces has been hedged.57,043 ounces for delivery at...

91,952 ounces has been hedged.

57,043 ounces for delivery at A$1359 in the first year of the contracted period followed by 34,909 ounces for delivery at A$1359 in the second year of the delivery period.

While it is not many ounces, I suspect there is a very good chance this will cost IGR tens of millions of dollars in lost cash flow. At A$1459 these hedges are out the money $9.19 million.

That could make for very costly finance. Especially if you also take into account the loss on puts purchased so IGR did not hedge forward even more gold at A$1359.

Hopefully if IGR's mining operation are performing as expected the disadvantage of these hedges will be dismissed in view of IGR's continued exploration success and exploration upside plus IGR's forward planning which at this point in time includes substantially increased hedge free gold production utlising cash flow.

At least we can be thankful IGR has not done an ADU, which has hedged forward a whopping 290,000 ounces of gold over the first 5.5 years of operations at US$1075/oz courtesy of Macquarie Bank as part of the Companys US$76M finance arrangements.