Reed gains on ASX after retiring debt

Reed Resources shares shot up on the ASX today after the gold miner said it had received a $27 million windfall after closing its gold hedge book.

Reed said it had retired all debts with financier Credit Suisse after closing the hedge book, and its cash on hand would be boosted by $7.7 million.

At close of trade today Reed Resources shares were up 40.6 per cent, at 9 cents.

Reed also told the market that at a review of its Meekatharra gold operation showed that it would still be economically viable at a gold price of $1,300 per ounce.

“The closure of the hedge book is a prudent decision that alleviates significant financial risk,” managing director Luke Tonkin said.

“It simplifies and strengthens the company’s balance sheet through the retirement of the Credit Suisse debt and increased cash reserves.

“The board considers this to be an excellent outcome in a volatile gold price environment.”

In addition to the review of the Meekatharra operation, Reed said it was considering a formal review to explore the option of asset sales, including its non-core exploration projects.