Voltalia Ord Shs VLTAF

Gold forward a requirement of funding of Namibia

[ndancer1]

Some research of BTO's financial information reveals that the Senior Creditor required BTO to purchase the gold forwards to guarantee a price for the initial full production (approx 141,000 ounces) year of 2015:

"As a result, the Company entered into a series of rand denominated gold forward contracts in the second quarter of 2013 for 117,984 ounces of gold with settlements scheduled between January 30, 2015 and December 31, 2018 at an average price of 14,909 rand per ounce (the rand forward price translates to an average gold price of $1,509 per ounce based on the June 30, 2013 rand/ U.S. dollar exchange rate of 9.88). These contracts are excluded from the 

scope of IAS 39, accounted for as executory contracts as they were entered into and continue to be held for the purpose of delivery in accordance with the Company’s expected production schedule. No fair value gains and losses on these commodity contracts have been recorded in the financial statement. The effect of these contracts will be to provide a fixed price in rand for a portion of gold sales. As at June 30, 2013, the outstanding gold forward contracts with respect to the Otjikoto Project had an estimated total fair value of $3 million"