CRS HEDGE POSITION @ 300905*Negative $13.4 mil (@ then current...

CRS HEDGE POSITION @ 300905
*Negative $13.4 mil (@ then current Gold Price A$631)

*June 05: forward sold 128 K oz @ $578 (+ 60 K oz sold call opt @ A$613)
Sept 05: forward sold 164 K oz @ $581 (+ 60 K oz sold call opt @ A$613)
Increase net forward sales by 36 K oz during Sept qtr.

Since end of Sept A$ Gold price has risen to current A$693.

So in effect they have put themselves in a particularly stupid position of having a hedge position equal to 2 years production and at a price which currently guarantees they make a loss.
Since 2003, CRS have never met any of their targets –either Production rate or Cost.
Their current target is 130000 oz/year and god help them if they can’t make that.

Imagine a Gold price of US$750/oz.
It should be a gold miner’s dream – if CRS cannot quickly fix their declining high cost production, instead of a big run in gold being a dream, it would be their nightmare.
If production cannot fill their hedges, and if they are forced by creditors to keep hedging, it will be messy.

I am in awe of their capacity for mismanagement.