LONDON (Commodity Online): Do you want to know how the global gold hedging has been in the last six months of 2009? Here is a brief on how companies fared on gold hedging, from the Global Hedge Book Analysis Q2-2009, brought out by GFMS Ltd.
Excerpts from the Analysis:
Net producer de-hedging remained limited in the second quarter, with just 0.98 Moz (31 t) removed from the global book.
This left the global producer hedge book, at end-Q2, at 14.73 Moz (458 t) in delta-adjusted terms.
Only a handful of companies made above schedule reductions to positions, notably AngloGold Ashanti, Lihir Gold and North
Queensland Metals.
The marked-to-market liability of the producer book contracted marginally to negative $5.3 billion at end-Q2.
Producers’ realised prices increased by 3% in Q2, averaging $908.43 for the set of hedged producers studied, relative to the period average of 922.18.
Net producer de-hedging activity was recorded in the second quarter at just 0.98 Moz (31 t), representing a continued limited level of cuts to the global producer book when compared with the prior year’s trend of elevated de-hedging. Last quarter’s activity left the total book at end-Q2 standing at just 14.73 Moz (458 t) in delta-adjusted terms.
The majority of the reduction came from changes to the forward sales component of the book, which fell by 10%, largely as AngloGold Ashanti increased its long 2009 forward position, mathematically treated as a de-hedge, and many producers continued to deliver into positions as they fell due.
In contrast, the delta-adjusted options portion of the book expanded in the second quarter, as the higher end-period gold price served to increase the delta of the majority component, the sold call position.
Some limited hedging was observed, from SilverCrest Mines, Coeur d’Alene Mines and Zijin Mining (which we have allotted to the second quarter), but more important is the heightened level of activity which has already been outlined for the third quarter.
AngloGold Ashanti announced another hedge book reduction during July, of 1.4 Moz (44 t) of ‘committed’ ounces (though this is not the same as a delta-adjusted fi gure). Partly offsetting this, both Great Basin Gold and Nevsun Resources are expected to establish options positions as part of project fi nancing procedures.
We expect de-hedging in the second half of the year to be of comparable volumes to the first six months.
Courtesy: Global Hedge Book Analysis, GFMS Ltd
