London, 30 September 2010

Gold miners returned to net hedging for the first time since the last quarter of 2005 in the second three months of this year, metals consultancy GFMS and Société Générale report.

But the release showed they are lifting their estimated rate of dehedging for the full year, with gold miners now seen cutting the amount of gold they have sold forward by 4.21 tonnes this year, up from a previous estimate of 3 tonnes.

The hike is due to a recent announcement by number three gold miner AngloGold Ashanti that it will accelerate its buy-backs of outstanding hedges to gain greater exposure to soaring spot gold prices.

Key Points:

• Net producer hedging was recorded in the second quarter of 2010, with 0.16 Moz (5 t) added to the global book.

• This represented a 2% addition to the total book, which stood at 7.19 Moz (224 t) at end-June.

• AngloGold was the largest de- hedger, removing 0.29 Moz (9 t).  All other reductions were limited in magnitude.

• New project hedges were put in place during the quarter by St Barbara Mines, Perseus Mining, Regis Resources and Integra Mining.

• The marked-to-market liability of the producer book increased slightly to total negative $3.49 billion in the first quarter.

• Looking forward, the impact of AngloGold Ashanti’s planned hedge book reduction has prompted us to increase our forecast for the full year, to over 4.21 Moz (131 tonnes).

If you have any questions on the study contact the GFMS office on +44 (0)20 7478 1777.

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