by Dow Jones Newswire

Miners continued their gold dehedging program during the first quarter at a slower pace, drawing down hedges by 0.8 million troy ounces to 7.1 million ounces, researchers VM Group said Friday.

The slower pace was expected, given the much shrunken size of the global hedge book, and compares with a 4 million-ounces decline in the fourth quarter of 2009.

The group retained its forecast for full-year dehedging in 2010 to be between 1.5 million ounces and 3 million ounces, but said much will depend on the activities of AngloGold Ashanti (ANG.JO).

AngloGold Ashanti was the leading dehedger in the quarter, reducing its committed ounces by 349,000 ounces to 3.547 million ounces, VM added. The company in November stated its plan to reduce the book by about 0.8 million ounces annually, which was broadly in line with its delivery schedule and which would remove its entire hedge book in five years.

The company has 281,433 ounces due for delivery this year.

“While the first quarter’s 0.8 million ounces reduction, if repeated in the next three quarters, would suggest a full-year figure at or above the top end of the [1.5 million ounces to 3 million ounces] range, the delivery schedule, which lists the hedges which are required to be delivered into in 2010, shows only another 1.2 million ounces of dehedging to come in 2010,” VM said. “Much will depend on what the largest hedger, AngloGold Ashanti, does.”

On a committed ounces basis the decline in gold hedging was slightly smaller, by 0.7 million ounces, taking total hedging on that measure to 8.2 million ounces.

Kinross Gold (K.T) was the second largest dehedger in the quarter, reducing its position by 323,000 ounces to 180,000 ounces, followed by Australia’s OceanaGold (OGC.AU), which closed out its entire hedge commitments of 204,000 ounces, made up of forwards and call options. The company continues to have 61,560 ounces of put options.

Eighteen other miners reduced their positions, with three others–Allied Gold (ALD.AU), Dioro Exploration and Apex Minerals (AXM.AU)–closing out their hedge commitments entirely.

But four companies added to their positions, with three initiating hedge programs. The new programs were by IAMGOLD(IMG.T), Regis Resources (RRL.AU) and Adamus Resources (ADU.V), with the fourth company adding to its positions being Dominion Mining (DOM.AU).

The mark-to-market valuation of the global hedge book fell in the first quarter to $3.2 billion,VM said.

The global book now breaks even at a gold price of $668/oz, up from $652/oz at the end of the fourth quarter.