hedging .. irj., page-5

Hi xerxes (another who can't stay off the screen for a day or two .....hehe)

Follow your gold/silver posts and thought I might chip in here .......

Hedging discussion on this and the EMP thread very interesting .......but has yet to provide a conclusive answer - applicable to resource or reserves etc ?
It would seem an industry standard does not apply and any hedging position is defined/interpreted and regulated by the individual Co's concerned (or can I not see the tree for the woods ....?)

Note the extract (sourced from a HC post 28/5/02)(apologies to author - unatributed in my file) which while giving slightly different figures to your own (although 30% odd adds up quickly delivered to a finite contract) perhaps raises the question of a Co being able to deliver to their contract more than "required" to effectively reduce or even 'buy out by supply' their hedged position.

"......they deliver around 15,000 ounces per month into contracts. Total hedging is being reduced and sits at approx around 220,000 ounces. Moreover, they have not entered into any new hedges. So they are around 50-60% hedged and by years end more closer to being unhedged."


If the (gold) market indicated it was poised to rally strongly surely they would endeavour to reduce their hedged position by any available means (and given CRS's financial position they would appear not to require any significant hedge to satisfy a finance house's security (a valid point related to hedging raised by another poster)

If this is in fact being done by CRS (and other mining co's) it throws yet another spanner into the hedging equation ......?


Regards Burnham (CRS,EMP,OXR,HIG,MMNOA)