Western Goldfields enters more fuel hedges to 2010Mr. Raymond Threlkeld reports
WESTERN GOLDFIELDS ANNOUNCES ADDITIONAL FUEL HEDGING FOR 2009 AND 2010
Western Goldfields Inc. has entered into additional fuel hedges for each of the next two years.All amounts are in United States dollars unless otherwise noted.
The added hedges involve:
- Additional diesel fuel hedging program for approximately 25 per cent of the Mesquite mine's diesel requirements for each of the next two years;
- Purchased 1,386,000 and 1,512,000 gallons of diesel at forward prices of $1.68 and $1.87 per gallon in 2009 and 2010, respectively.
The company announced its original fuel hedging program in Stockwatch on Dec. 18,2008, with Western Goldfields hedging 1,512,000 gallons per year in each of2009 and 2010. With its most recent hedges, the company secured prices for1,386,000 and 1,512,000 gallons of diesel for 2009 and 2010 at forward pricesof $1.68 and $1.87 per gallon, respectively. Combined with its previouslyannounced hedging program, Western Goldfields has now hedged approximately 50 per centof its diesel requirement for each of the next two years at weighted averageprices of approximately $1.75 and $1.94 in 2009 and 2010, respectively. Inaddition to the hedge price, Western Goldfields pays approximately 15 cents pergallon for taxes and delivery charges. The hedge prices are materially lowerthan the company's plan which incorporated budgeted diesel costs of $2.40 in2009 and $2.75 per gallon, thereafter including taxes and delivery charges.Approximately 20 per cent of Mesquite's operating costs are attributable to dieselconsumption.
We seek Safe Harbor.