As gold price falls, miners pick derivatives to protect income

Section:

By Jan Harvey
Reuters
Thursday, July 30, 2015

LONDON -- Gold mining companies are turning increasingly to derivatives to lock in future revenues, as an industry still smarting from losing out on a 12-year bull run gets creative over protecting its income during the metal's current downturn.

While miners overall remain wary of hedging -- the outstanding global hedge book stood at just 6.2 million ounces at end March compared with 57.2 million a decade earlier -- those who do favour the strategy are leaning more strongly towards options.

Data released this month from Societe Generale and GFMS analysts at Thomson Reuters showed options structures made up 46 percent of the global hedge book by the end of the first quarter of 2015, compared with just 16 percent in the same period a year before and 11 percent in 2013. ...

... For the remainder of the report:

http://www.reuters.com/article/2015/07/30/gold-hedging-idUSL5N10945H2015...



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