out, page-5

re: phil cant believe state one stockbroking still If the gold price goes up, the theoretical mark to market of the hedge book goes further into the red and under the new accounting rules, has to be washed through the P & L account-even though the book may be profitable in its own right, (eg hedge is at A$700 against the current price around $850 would have to take the $150 difference on the chin even though operating/total cash costs may be only $600, ie making a profit on production).

The accountants have gone too far with this one-they are making you write off opportunity profits. At least it does give some indication as to the contingent liabilites if there is a hiccup in production.

On the falling gold price equation, that is not so much financially related as 'sentiment' related. Gold is down so punters simply sell their gold stocks.

Best result for RSG is either a flat gold price or increased production above the hedged amount.

Cheers,TAS