how, page-3

Well - first off, when examining a resource company, focus on operating cash flow and free cash flow. As for why they don't show positive net earnings, accounting standards require mark to market for derivatives for non-designated hedging. Thus, if you look at the income statement they have taken huge non-cash charges because of the hedges they currently have. However, if look at cash cost per ounce, the most unfavorable hedged amounts are about break even. So, in cash reality, they aren't losing on these, but for purposes of accounting they are required to record an expense based on improvements in the gold price in relation to the derivative instruments valuation.