Hi JS,Can see where you are coming from.I am no expert on...

Hi JS,

Can see where you are coming from.

I am no expert on hedging, so perhaps some input from someone with expertise in hedging by Australian gold mining companies is required.

From what I can see and understand there is quite a lot of transparency in the process in that the hedge has to be disclosed to shareholders stating the amount of gold involved, date of delivery and monetary value of the sale price to be received.

I understand that each hedge has to be checked by the auditors to ensure it meets appropriate standards including cross referencing to the COMEX strike rate for the delivery date on the day the hedge is made – obviously if the strike price falls outside the parameters for the strike rate the auditors have to report it.

The June Quarterly Report contained details of the hedges made by FML in the quarter and there has not been one comment raised about them, so one can assume that shareholders thought they were good hedges (these same hedges will now have been subject to audit, so any adverse comments will appear in the Annual Report due in the next few days).

From memory FML does not undertake that much hedging, although I am aware that in the distant past it was forced to hedge some production against a bank loan it had at the time.

Appreciate that this does not answer all the questions you posed.

cheers, kentwang