Cambior trims hedgebook

Cambior (CBJ-T) has repurchased 189,000 oz. gold from its hedging program at an average price of US$342 per oz.

Of those ounces, 134,000 will go toward closing out hedging contracts in 2003, resulting in a payout of US$1.7 million. The remaining ounces will be applied against hedge positions maturing after 2003.

The average market price of gold since the beginning of 2003 has been US$354 per oz.

In addition to delivery from production so far this year, Cambior expects to have trimmed 307,000 oz., or 24%, from its end-of-2002 hedge commitments of 1.3 million oz. at an average of US$301 apiece. That position included 114,000 oz. of call options sold at an average of US$301 per oz.

In the end, Cambior says about 42% of its production for 2003 will remain unhedged.

Cambior says the recent buyback is part of its previously announced plan to trim its hedge book by about 40% to around 800,000 oz. gold in 2003.

In 2002, Cambior cut its hedging commitments by 600,000 oz., or 32%, by delivering into existing positions, restructuring certain obligations, and repurchasing other positions. During the year, the price of gold averaged US$310 per oz. — the highest since 1997.

Cambior is required to hedge 30% of its production at a minimum of US$290 per oz. during the life of an existing US$65-million credit facility. The facility will help fund development of the Rosebel gold mine in Suriname.

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