I asked Dave Webb what his reaction was to reading that some forum participants have taken issue with the concept of hedging production. He said that some seemed unaware of the differences between loan guarantees vs speculative hedging. The former, he said, is a requirement of lenders, i.e., they lend you $100 million, and you can pay it back in 3 years provided gold is >$1000. And he said that a miner could be required to

a) forward sell 3 years production at $1000 per ounce,

b) purchase a put for 3 years production at $1000 per ounce,or

c) use some combination of these and other strategies to guarantee to the bank you can sell gold at $1000 per ounce or better. The later style of hedging is speculative and won't happen.

I hope this helps. (And yes it's true, Puzzleman has filled my private email box with stuff relating to this potential financing event. Much of it I've shared with Dr. Webb.)

Baires