The Fullest Possible Exposure To The Gold Price

UK-listed gold miner Randgold Resources has closed out 148,500 ounces of call options for 2004.

This was in line with Randgold's strategy of maintaining the fullest possible exposure to the gold price. This company is fundamentally not hedger, other than in those cases where revenue streams need to be protected on capital projects or debt finance.

The company said that the only remaining hedges it has now are those which form part of the financing structure for Morila, its joint-venture mine in Mali.

The call options, which had an average strike price of $353.00 an ounce, were closed out at a net cost of $2 million, payable in 2004. As these commitments had in the past been valued on a marked-to-market basis, this cost has already been provided for in prior quarters.

The Morila financial instruments are substantially fully matched hedges, so that their impact on the company's income statement has effectively been eliminated, it said. ©

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