No production for another 4-6 weeks, realigning hedge book etc.
If the company had a dodgy project without real reserves it would have been gonski two months ago-however the project is a 'real one'. The hedges ,if crystallised tomorrow, would leave the banks out of pocket to the tune of US$83m plus based on current spot markets for gold, silver, zinc and copper and the reported company position as per the 2005 Annual Report.
However, the hedge book is based on fact not fiction (unlike SGW) and is structured using forward sales. This gives substantial breathing space. The counterparties (banks) can role the exposure out twelve months further without too much stress from credit committees(?), and even toss in a further few bob once green light is forthcoming. The hedges only represent less than 30% of reserves so plenty of blue sky to play with rather than taking a massive hit now.
Short term cash-guess Lion and ABN Amro/Gryphon have done some homework and provided some buffers in their assessments.(Would have thought no cash from operations in the door until April was one of them IMO!)
Dominguez et al? Still to stump as no Appendix 3B so there is a few more sheckles.
Now lets cut the politics and pay off the right people! Just joshing. But speaking of politics, the IRN bid must be getting serious airplay in the LSG boardroom at the moment-once the green light is given!
Predictions for future share price? My crystal ball is no better than anyone elses. These shares are Speculative!
Cheers,TAS
LAF
lafayette mining limited
