"Hedging is a four-letter word around here," said Darren Klinck, vice-president for investor relations at Oceanagold Corporation (OGC.AU), an unhedged gold producer that estimates it will produce more than 270,000 ounces in the fiscal year that began July 1 from its mines in New Zealand.Another participant quoted, Sean Russo, said the aversion to hedging has become irrational.
Klinck, who was attending the annual Diggers & Dealers mining forum in Western Australia's gold-mining capital Kalgoorlie, said major shareholders would not support the company if it was hedged, as their typical investment objective is leveraged exposure to the gold price.
Virtually all the small and mid-size miners at Diggers & Dealers gave the same message.
The article itself intimates that the current anti-hedging tilt could be a contrary indicator. For the record, Barrick bought back its hedge book on the same day of gold's 2009 peak.