Total hedge 20000 oz per quarter for remaining 36mths, at 875 per oz. Key is counter-party who holds hedge is subsidiary of Lehman Brothers known as LBCC, which is in administration. LBCC is unable to fulfill obligations under hedging agreement as if Aus gold dropped under $875 (unlikely) nil funds to make good their side of hedge and NGF has to agree to assignment of hedge to a 3rd party (which obviously NGF will not agree to). So up in air at moment re 20K of 30-35K gold oz produced per quarter and price ontained. My interpretation is NGF will not have to fully pay out hedge as counter-party LBCC unable to fulfill their side of hedge if circumstances change (ie $Aus gold falls to less than $875).Note when LBCC went into administration they effectively defaulted on their future financial obligations pertaining to the hedge (ie NGF would have stood in line as an unsecured creditor), $Aus gold was at 950 at this time. So hedge may have come into play, the fact that the hedge moved in LBCC's and not NGF's favour is legally a moot point.
NGF Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
