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To Hedge or Not to Hedge; The Dilemma for Gold Mining Companies

Posted on 14 July 2014

A major Russian gold producer earlier this month entered into the gold mining industry’s biggest hedging transaction in six years. According to analysts at Thomson Reuters GFMS, gold producers will return to net hedging this year for the first time after 2011. Hedging future production certainly has its benefits.
It guarantees future cash flows, especially during a volatile period like the one seen in 2013 when gold prices fell nearly 30%. However, it also limits the upside potential for mining companies………………………………………..Full Article: Source


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