good results, page-2

re: good results - hedgebook disaster! Everything fine but there bloody hedgebook - yikes?

Have a look throught their 2003 full year report.....can you find the details of their hedging?????? NO! wonder why???

If you wanna see details about their hedging (i wouldnt really call it hedging anyway) look carefully in their 4th quarter report (from july 25)

Resolute predict 155,000 ounce production next year, following points are details about their hedging for 2004:
- They have 116,000 ounces forward sold @ US$304
- They have sold call options: 25,000 @ AUD$665 (no real problem here as this shouldn't get exercised unless aussie dollar tanks or gold skyrockets)
- They have sold call options: 105,000 @ US$362 (BIG PROBLEM). If POG holds, this will be exercised, and they will have to roll most of the 116,000 ounces forward sold into 2005.

Following is a quote from one of Resolute previous reports: "Resolute's hedge book is flexible in nature and the forward sales contracts maturing in the years ending 30 June 2003 and 30 June 2004 can be rolled to later dates at the Company's election. This gives the Company the choice of fully participating in spikes in the gold price in the short to medium term."

What garbage, they are gonna be forced to defer delivery into forward contracts coz of their shithouse hedging because they will have the call options exercised.

Another blaring ommission from the latest report - where was the average realised sale price per ounce?? - this is usually one of the first points mentioned by a reporting gold company. I also couldnt find the FOREX hedging in the latest report - last time i remeber seeing it they had forward contracts on US dollars in the low-mid 50cents, so they are well in the money but how far out do they go and much is left???? - i couldnt be bothered looking in their other reports for it - i might do it another time. Anyway, their realised gold price for next 2 years will be crap, but Golden pride is a great cash cow for the company for the next few years, so all eyes on the Syama results - if it's a goer, then everything i just previously said is immaterial.

btw i am a holder

cheers