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Unformatted text preview: in India, Europe, the United States, and the Middle-East. Bar hoarding and implied net investment
demand grew by approximately 1.2% in 2012, while net producer de-hedging contributed a small 20 tonnes
of demand. Central banks, which had been net sellers of gold for several years until they became net buyers
in 2010, continued to increase purchases which were up 17.3% in 2012 compared to 2011. This was
primarily driven by very low sales by signatories to the Central Bank Gold Agreement and continued buying
by central banks outside of the Central Bank Gold Agreement in order to diversify their foreign exchange
If gold prices continue to increase, and the global economy continues to experience an economic slowdown
caused by the European sovereign debt crisis and the slowing of the Chinese economy, growth in fabrication
and jewelry demand may be affected in the coming year.
The Company generally has a ‘‘no gold hedge’’ policy. However, the Company may acquire gold and/or silver
hedge or derivative product obligations as a result of an acquisition or under financing arrangements. A
hedge program can protect the Company against future declines in price and may result in the Company not
fully benefiting from future price increases. MDA10 KINROSS GOLD 2012 ANNUAL REPORT Source: London Bullion Marketing Association London PM Fix During 2012, the Company realized an average gold price of $1,643 per ounce compared to the average spot
gold price of $1,669 per ounce.
The variance was primarily due to gold hedges that were acquired with the Bema acquisition, as they
reduced the average price realized by $20 per ounce for the year ended December 31, 2012. The Company
entered into offsetting gold purchase contracts in 2010 and in early 2011 to neutralize the impact of all
remaining gold forward sales contracts, resulting in gold production being 100% exposed to spot gold price
subsequent to dates these purchase contracts were entered into. During the third quarter of 2011, the
Company closed out and early s...
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- Spring '14