16/12/2008 - 14:12

Intrepid closes hedge book for WA mine

16/12/2008 - 14:12

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Brisbane-based Intrepid Mines is set to benefit from a full exposure to the gold price as it closes its hedge book for its Paulsens gold mine in Western Australia.

Intrepid closes hedge book for WA mine

Brisbane-based Intrepid Mines is set to benefit from a full exposure to the gold price as it closes its hedge book for its Paulsens gold mine in Western Australia.

In a statement, Intrepid said it has delivered the final ounces, at a price of $A627 per ounce, to Westpac this week under existing hedging arrangements required under the financing deal.

At lunchtime today, the spot price of gold in Sydney was $US833.60 per fine ounce, up $US2.65 on Monday's close of $US830.95.

The hedge book closure leaves Intrepid debt free with $US12 million cash in the bank as at the end of November.

"In the current financial environment, where the ability to self-fund is critical, I am delighted that we can enjoy the benefit of full exposure to current highly favourable gold prices," Intrepid chief executive Brad Gordon said.

"Paulsens is looking to a resource upgrade soon to extend the mine life and underpin future development."

Intrepid said it is continuing its asset review.

 

The announcement is pasted below:

 

Intrepid Mines Limited (ASX: IAU; TSX:IAU, IXN) (the "Company") is pleased to announce that its Western Australian gold mine, Paulsens, has delivered the final ounces to Westpac under existing hedge arrangements.

Completion this week of hedge delivery ounces at A$627 per ounce will now allow the Company to enjoy full exposure to the spot gold price - currently A$600 per ounce higher - and significantly enhance the mine's current positive operating cash flow.

In the eleven months to November 2008, Paulsens has produced 72,500 ounces of gold at a cash cost of US$481 per ounce, of which a total of 43,971ounces were delivered against the Westpac hedge arrangements.

These hedge positions were a requirement of the project financing facility provided for construction of the process plant and site facilities at Paulsens.

The debt associated with this facility was prepaid in June 2008 and the Company is net debt free with US$12 million cash at bank as at 30 November 2008 (unaudited).

Intrepid CEO, Brad Gordon, said: "In the current financial environment, where the ability to self-fund is critical, I am delighted that we can enjoy the benefit of full exposure to current highly favourable gold prices."

"Paulsens is looking to a resource upgrade soon to extend the mine life and underpin future development," he said.

Whilst continuing to focus on extracting maximum value for shareholders from its three main assets, the Company has continued a programme of non-core exploration and non-mining asset divestments, to protect and enhance the Company's cash position.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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