Ann: Suspension from Official Quotation , page-19

Thanks tzsuj

Just on the hedging it does seem that they got caught out by unfortunate timing (bad luck rather than bad management).

Perseus (PRU), another west african goldie, also went through Macquarie Bank for some finance to develop a new mine and also had to enter into some hedges so as to secure the finance.

Whereas Adamus locked in their hedges in February at US$1075 per oz on 290,000 oz of production over five years (which is about half its targetted production in that period) so as to obtain US$76m in loans from Macquarie, Perseus had up to to 30 June locked in 170,000 oz at US$1240 per oz over 4 years to line up US$65m in loans from Macquarie. They say they have the option of borrowing as much as US$85m for which they would need to forward sell a total of 230,000 oz. Note that the Perseus project is much larger and even with some really out of the money put options that they have lined up they will still have a maximum of only 10% of their total targetted production hedged (or about a quarter of their production in the time the hedges are in place).

Clearly Macquarie offered Perseus a much better deal than Adamus was able to arrange, but given that Adamus are 6 to 9 months ahead of Perseus in developing their mine that has probably got a lot to do with when they were negotiating the deal with Macquarie.

Still it must be a bitter pill for Adamus to know that Perseus is getting more than US $150 per oz more for their hedged production (and that Adamus were required by Macquarie to hedge a lot more production than Perseus was for the roughly the same amount of loan money).

You a dead right about Adamus still doing fine with its likely cashflows even from its hedged production. The point I was trying to clarify is whether the paper losses on the hedged production has to be put through the profit and loss statements.

I'll give it a rest on posting on this thread for now just so folks don't think I'm trying to downramp. I'm not, just trying to get a handle on some goldies that I currently know virtually nothing about. Good luck to holders.

Cheers