hedging has already cost the company $11.2m, page-13

Thanks again walkeiler

It looks like CopperCo's demise had nothing to do with its hedge, which in the circumstances was actually a positive.

The problems related to the level of cashflow and the need to make a $45 million debt repayment which had resulted from a merger with another company. CopperCo was unable to get access to alternative funding so it went into administration and the shareholders lost.

There is no relationship between the circumstances of ADU and CopperCo. If the gold price tanks then ADU's profitability will be supported. If the gold price exceeds $1075/ounce then ADU will not participate from the upside of 50% of its production.

In the case of ADU the hedge is actually there to ensure it can meet its debt repayments. My view is that ADU should be able to repay the loan in a much shorter period than the length of the hedge and hence it is excessive.

loki