Hedge reduction parade continuesAngloGold cuts hedge book
Allan Seccombe
Posted Thu, 02 May 2002
South Africa's largest gold producer AngloGold said on Tuesday it had cut its open hedge book by 1.7 million ounces to 12.9 million ounces in the March quarter, while its gold output for the period dropped.
"In the context of the firmer (gold) price, we have continued to actively manage our hedge book and increase exposure to the spot price," Chief Executive Officer Bobby Godsell said in a statement.
The company's hedge book, or record of forward gold sales, was reduced by another 643,000 ounces by the end of April from the 12.9 million ounces at the end of March, AngloGold said.
The marked-to-market value of the hedge book, which measures the forward contracts against the spot gold price, was a negative 5.3 billion rand based on a gold price of $310.90 an ounce on April 29.
Anglogold had 106,897 kg of gold sold locked in forward prices ranging from 89,939 rand/kg in 2003 to 163,895 rand/kg in December 2011. The rand gold price is currently over 100,000 rand/kg.
The group had eliminated the low-price rand gold forward contracts for the rest of 2002, Godsell said.
"Whereas at 31 December 2001 we had 60 percent of our forecast 2002 gold production sold forward, today we have only 32 percent of the remainder of this year's anticipated production sold forward," Godsell said.
The average spot price for the March quarter was $287 per ounce, the highest level since December 1999, he said.
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Good luck to all