new issue, page-12

The "hedging losses" aren't really losses. The commodity swap involves WDR committing with another party - Macquarie? to pay them the difference between the received iron ore price and the floor price of A$120/tonne each month. If the received iron ore price is greater than A$120 then WDR has to pay the difference and vice versa. The problem that WDR has is that they are not producing at the contracted rate so the payments received from shipments are not covering the hedge contracts. They also appear to have entered into some currency hedges which are only disclosed in the half yearly accounts.

I believe that the company will survive this episode and have bought some more shares at 46c. However a lot will depend on their success in getting the shipments up to the planned totals. DYOR