“We are positive in our outlook for gold, and reducing our committed [hedged] ounces will increase the already significant upside for our shareholders,” said Rex McLennan, Placer Dome’s chief financial officer.
Gold spot offer rates went up by $1 following the announcement to around $3.145 per ounce, but some analysts said this was not justified. John Reade, precious metals analyst at UBS Warburg in London, said most of Placer Dome’s hedge book reduction has already taken place. But he added that further evidence that producers are willing to buy gold “serves to reinforce the view that the metal will be supported by opportunistic producer buying”.
Placer Dome produced 2.75 million ounces of gold last year.