Crystallex is hedge free.
The Company believes that investors in gold companies desire full exposure to the price of gold and they assign a discount to companies that restrict such exposure by hedging a portion of their gold sales.
In 2003, Crystallex announced plans to eliminate its existing hedge commitments, consisting of call options sold and forward sales contracts. This has been accomplished by repurchasing forward sales and call option contracts at opportune times. To facilitate this approach, the Company has negotiated to move certain commitments to future periods with hedge counter parties.
Since the beginning of 2003, we have reduced our hedges.
- Contract ounces at January 1, 2003: 472,000
- Contract ounces at December 31, 2003: 350,000
- Contract ounces at December 31, 2004: 164,000
- Contract ounces Q4 2005: NIL
(closed out at $505, converted into
term loan)
On December 23, 2005, Crystallex announced that its subsidiaries have restructured their outstanding obligations to Standard Bank Plc to close out all outstanding gold forward sales and call option transactions and amend its existing credit agreement.