GFields closes out Ghana hedge

Johannesburg - Gold Fields said on Friday it had closed out the last of its hedge positions and bought back 160 000 ounces of gold forward sales at an average spot price of $256.10 per ounce.

South African-based Gold Fields said in a statement that it had generated a net profit of approximately $4.5m.

The hedge position was held by 71%-owned Gold Fields Ghana and was required by lenders to the Tarkwa Gold Mine in terms of potential debt covenant obligations.

\"Gold Fields is now totally unhedged, which is an affirmation of our policy in this regard,\" said Gold Fields Chairman and Chief Executive Officer Chris Thompson.

\"We thought this was an opportune time to close out the last of our hedges given the current weakness in the gold price, which we believe is not sustainable,\" he added.

Gold Fields, a four-million-ounce a year producer, repurchased the bulk of its hedges in 1999, but maintained a small amount of cover for its Ghana mine.

London gold sank to $256.70 an ounce early on Friday, its lowest since September 1999, but later regained some of its losses on a weaker dollar and book squaring ahead of the US President\'s Day long weekend.

As a result of closing out its remaining hedges and given the cash generated by its Ghana mine, Gold Fields said it would retire all or a substantial portion of the subsidiary\'s remaining project loan of $25m.