walkeilerThanks for the response and an attempt to provide some...

walkeiler

Thanks for the response and an attempt to provide some background.

I have been invested in about 20 gold companies since early 2006 so I am not the novice you suppose me to be. I have a background in accounting (and economics) so looking at a company's balance sheet does not scare me.

Yes I am aware that the hedge will become a balance sheet item - so what. Have a look at the balance sheet of many companies and see how much of what they have there is just "Goodwill". What matters more is profitability and cashflow. We know that the hedge will impact negatively on ADU's level of future possible profitability if the gold price exceeds $AUD1075, so you are not saying anything new there.

Yes I do read widely, and am aware of expectations that gold could go to $2000, $5,000, $10,000 etc - but at this point this is speculation and we do not know if or when that will happen. I repeat, the key as to whether there will a negative impact from a higher POG via the hedge is the extent to which that will be accompanied by higher production costs.

Just speculating about this during a period when we may well be facing deflation rather than inflation is going overboard.

As regards the terms of the loan having conditions allowing Macquire to convert into equity, I suppose that is something worthwhile checking out.

Can you explain what happened in the case of CopperCo and its relationship with Macquire? I had assumed it failed because of the GFC when copper prices fell.

loki