Newcrest will close last gold hedges within 12 months

From Reuters
Tuesday, September 25, 2007

http://www.reuters.com/article/marketsNews/idUKN2543167720070925?rpc=44

DENVER -- Australia's biggest gold miner, Newcrest Mining Ltd., said Tuesday it is committed to buy back the remaining 1.7 million ounces of its gold hedges from the market in the next 12 months, a move that could extend support to the price of bullion.

"Because of price, risk, and liquidity market issues, we didn't buy the last 1.7 million ounces before we did the deal. We are committed to the market that we are going to remove that last part of the hedge within the next 12 months," Greg Robinson, Newcrest's finance director, said during his presentation at the Denver Gold Forum.

"I can't tell you more about when we are going to do it because the market tends to front-run you very quickly," Robinson said.

Robinson was referring to Newcrest's deal last week in which it had raised A$1.586 billion (US$1.33 billion) in an institutional entitlement offer to close out its gold hedge book.

Earlier in September Newcrest said it had purchased 2.3 million ounces of gold on the open market at an average price of A$831 an ounce. The company did not give a U.S. dollar figure then.

Newcrest is the latest in a line of gold miners globally reducing their hedges, including Barrick Gold Corp., Newmont Mining, Lihir Gold Ltd., Harmony Gold, AngloGold Ashanti, and Buenaventura.

Unwinding the hedges will meet demands by Newcrest's shareholders for the company to become fully exposed to market prices for gold, which have mostly been on the up for the last six years.

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