Ann: Hedging Contracts Locked In , page-7

Siamese, your example is completely ridiculous.

'Suppose we have some extremely high inflation in a couple of years. The full costs of producing an ounce of gold for ADU are US$2,500 but ADU is getting US$3,500.'

That would mean that production costs go up fivefold en the price of gold threefold. If you think that wages in Ghana will go up that much, buy a Ghana consumer products company.

The hedging by Adamus has protected shareholders, because it prevented a lot of dilution. Per share a lot more gold is left.

This locks in the price for half the production in the first 5,5 years, enough to cover the costs and return the loans and leaves all other production open to (probably rising)prices.