Hedging/Derivatives
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The Group’s policy is to remain unhedged to the gold price. However, hedges are sometimes undertaken on a project specific basis as follows:
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to protect cash flows at times of significant expenditure; |
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for specific debt servicing requirements; and |
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to safeguard the viability of higher cost operations. |
Gold Fields may from time to time establish currency financial instruments to protect underlying cash flows.
Diesel hedge *
Australia
On 1 May 2013, St Ives Gold Mining Company (Pty) Ltd entered into a Singapore Gasoil 10PPM cash settled swap transaction contract for 7,500 barrels per month
effective 1 June 2013 until 31 March 2014 at a fixed price of US$115 per barrel.
At the end of March 2014 the mark to market value on 7,500 barrels was positive US$0.05 million. |
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* Do not qualify for hedge accounting and are accounted for as derivative financial instruments in the income statement.
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