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Accelerated Supply: Gold reaching the market through lending and leasing before it is physically produced.

Accrued interest: The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.

Acid mine drainage (AMD): Highly acidic and metal-rich run-off resulting from the oxidation of sulphide minerals when they are exposed to air and moisture. Usually creates a red and orange sludge that requires treatment so as not to contaminate waterways.

Acquisition: The acquiring of control of one corporation by another. In “unfriendly” takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management

Actual Volatility: Actual measured price volatility from the historical data records. See volatility and contrast implied volatility.

Adit: A horizontal access from the surface to underground mine workings; synonymous with a tunnel (contrast with shaft).

Advance premium forward: Forward contract offering a constant contango throughout contract life; similar to flat rate forward and stabilized contango.

Agglomeration: The practice of adding lime or cement to ore placed on the leach pad to bind clay material together and enhance permeability and recoveries.

American style: (Option) that can be exercised at any stage during its life, in other words at or before expiration date. Contrast European style.

Annual report: The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year

Asian options: A history-dependent option where the outcome is not only reliant on whether or not the option is in-the-money at expiry, but also depends on the average price of the underlying throughout the option life. They are used the underlying price

Ask: the price at which a dealer offers to sell.

Assay: a test to ascertain the fineness and weight of a precious metal.

Asset-or-nothing calls (puts): History-independent exotic options which have no income if the price of the underlying at expiry is below (above) the strike price.

Assets: Everything a corporation owns or that is due to it: cash, investments, money due it, materials and inventories, which are called current assets; buildings and machinery, which are known as fixed assets; and patents and goodwill, called intangible

At-the-money option: An option with a strike price equal to that of the current price of the underlying.

Auditor’s report: Often called the accountant’s opinion, it is the statement of the accounting firm’s work and its opinion of the corporation’s financial statements, especially if they conform to the normal and generally accepted practices of accountancy

Average strike options: Asian options where the income depends on an average strike price rather than an average underlying asset price.

Backfill: The practice of placing waste in open pits or underground voids when mining has ceased; employed to avoid creating waste dumps on the surface and for stability underground to prevent collapse.  It also refers to the material itself.

Backwardation: A market situation where the spot price trades at a premium to the forward price. Opposite of contango.

Balance sheet: A condensed financial statement showing the nature and amount of a company’s assets, liabilities and capital on a given date.

Barrier options: Unlike standard European options where the income depends only on the price of the underlying at expiration, barrier options are of the price of the underlying during the life of the option and whether that price breaches some predetermin

Bear: Someone who believes the market will decline.

Bear market: A declining market.

Bid: the price at which a dealer is willing to buy.

Binary options: Unlike standard options which have a constant income, binary options have variable (usually all or nothing) pay backs depending on whether or not the price of the underlying meets some pre-agreed condition. Binary options can be either his

BIS: Bank for International Settlements

Block: A large holding or transaction of stock, often 10,000 shares or more.

Boiler room: an enterprise that uses high pressure sales tactics, false or misleading information, and scare tactics, generally over the telephone, to sell overpriced or worthless investments to unsophisticated investors.

Bond: Evidence of a debt on which the issuing company promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date.

Bonds: Means of raising debt through the capital markets. See also Gold-Backed Bonds.

Boston options: See Break forward options.

Break forward options: Similar to the standard call option, except that it has no initial cost.

Broker: An agent who handles the public’s orders to buy and sell securities, commodities or other property in exchange for a commission charged for the service.

Bull: Someone who believes the market will rise.

Bull market: A rising market.

Bullion: precious metals in the form of bars that are at least 99.5% pure.

Bullion Bank: a high credit bank that can borrow gold from central banks to lend to the public.

By-product: A secondary metal or commodity that can be extracted as part of or along with the primary ore and sold profitably.

Call: the right, but not an obligation, to buy a commodity or a financial security on a specified date in the future at a predetermined (strike) price.

Capital gain or capital loss: Profit or loss from the sale of a capital asset.

Carbon-in-leach (CIL): A gold recovery technique in which cyanide is used to place gold in solution and the gold is subsequently adsorbed onto carbon in a simultaneous process. The carbon is removed with the gold for further refining.

Carbon-in-pulp (CIP): A gold recovery process similar to carbon-in-leach in which cyanide is used to place gold in solution. Then the gold-bearing solution is adsorbed onto carbon pulp in a subsequent sequential process.

Cash flow: Reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves.

Cash sale: A transaction on the floor of the stock exchange that calls for delivery of the securities the same day.

Cash-or-nothing calls (puts): The simplest, history-independent binary options which have no pay out if the price of the underlying is below (above) the strike price at expiry. They yield a constant sum if the price of the underlying is above (below) the

CBOT: The Chicago Board of Trade

CCA: Comex Clearing Association

CFTC: Commodity Futures Trading Commission, the futures and options watch-dog.

Chooser options: An option bought and paid for immediately but after an agreed time, the buyer can elect whether the option is to be a put or call with an equal strike price and equal remaining time to expiry. The chosen put or call is a standard European

Collars: Options which have the same pay out as the standard call except that the upside is not unlimited. It is subject to a maximum. The option buyer foregoes any further income above this maximum.

COMEX: The Commodity Exchange in New York. Merged with New York Mercantile Exchange (NYMEX).

Commercial production: An accounting designation that refers to an operation running at its anticipated capacity usually for a consecutive 30-day period.

Commission broker: An agent who executes the public’s orders for the purchase or sale of securities or commodities.

Common stock: Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume more risk, but usually get more control and could

Complex choosers: Similar to plain chooser options except that either the put/call strike prices or the put/call time to expiry (or both) are not equal.

Compound options: These are options on options. The underlying asset is an option rather than a tangible commodity or security. Valuation of the option is complicated by the fact that two expiry dates must be accounted for: the time to expiration of the compound and the time to expiration of the underlying option.

Concentrate: Ore that has been upgraded through various processes to remove waste and increase the metal content subsequent to further refining.

Contango: A market situation where the spot price is lower than the forward quotation; the differential representing the carrying (financing) costs and prevailing interest rates. Opposite of backwardation.

Contract: Basic unit of a derivative product.

Contract-specified price: The delivery price determined when a contract is signed. It can be a fixed price or a base price escalated according to a given formula.

Correction: a decline in prices following a rise in a market.

Cost curve: Graphical representation of the costs of producing a metal for an entire primary industry. Usually cumulative output expressed in percent plotted against unit operating costs.

Coupon: Annual interest rate associated with capital market bond issues.

Crown pillar: A thick layer of rock (typically > 50 m) purposely left in place between underground mine workings and the surface above to prevent cave-ins.

Crushing circuit: A technique of mechanically treating ore to break it into finer-sized fractions for better recovery using additional processing.

Current assets: Those assets of a company that are reasonably expected to be realized in cash, sold or consumed during one year. These include cash, government bonds, receivables and money due usually within one year, as well as inventories.

Current liabilities: Money owed and payable by a company, usually within one year.

Cutoff grade: The lowest grade, in percent yield, of ore at a minimum specified thickness that can be mined at specified cost.

Cut-off grade: The minimum economically extractable grade determined by a given metal price assumption; varies ore body to ore body.

Cyanide: Usually refers to sodium cyanide solution used to extract gold and/or silver from ore through dissolution.

Delayed opening: The postponement of trading of an issue on a stock exchange beyond the normal opening of a day’s trading because of specific market conditions, such as an imbalance of buyers and sellers or corporate news that needs time to circulate.

Delta hedging: The probability of an option being exercised against the holder, with changes in the spot price relative to the option strike price.

Delta: A measure of the instantaneous rate of change in the value of an option for a one-unit change in the price of the underlying commodity or asset.

Derivative (instrument): A financial instrument or paper product which has a value based on an underlying asset.

Development (underground): Categorized as infrastructure excavations such as access tunnels that are equipped with services in support of mining; associated costs are usually capitalized.

Development drilling: Drilling done to determine more precisely size, grade, and configuration of an ore deposit subsequent to the time the determination is made that the deposit can be commercially developed.

Dilution: Waste material that cannot be avoided during the underground mining process and is subsequently sent for processing along with ore thereby lowering the overall grade of the material.

Direct cash cost: The complete expense of extracting a metal or mineral that includes mining, processing, and mine site G&A; does not include production taxes and royalties; compare total cash costs.

Diversification: Spreading investments among different types of securities and various companies in different fields.

Dividend: The payment designated by the board of directors to be distributed pro rata among the shares outstanding.

Doré: A bar of precious metal produced at mine site refineries. Usually consists of gold and silver. It is sent to commercial refineries for further purification and metal separation.

Down-and-in calls: A barrier option where the call is paid for up front but not received until the knock-in barrier is reached. See also up-and-in calls.

Down-and-in puts: A barrier option where the put is paid for up front but not received until the knock-in barrier is reached. See also up-and-in puts.

Down-and-in puts: A barrier option where the standard calls are paid for and exist until such time as the price of the underlying falls below a predetermined barrier after which the options cease to exist.

Down-and-out puts: A barrier option where the standard puts are paid for and exist until such time as the price of the underlying falls below the predetermined barrier, after which the options cease to exist.

Earnings report: A statement, also called an income statement, issued by a company showing its earnings or losses over a given period. The earnings report lists the income earned, expenses and the net result.

Electrowinning: an electrochemical process used to recover gold and other metals from solution in the leaching of ores and concentrates.

Enterprise value (EV): Calculated as market capitalization and net debt combined.

Equity: The ownership interest of common and preferred stockholders in a company.

European style: An option that can only be exercised on the date of expiry.

Exchange options (1): An option offered by an exchange. It is a standard contract subject to the rules and regulations of the governing exchange. The COMEX option offers the buyer a COMEX futures contract should the option be exercised.

Exchange options (2): An exotic option which allows the holder to exchange one underlying asset for another.

Exercising an option: The option purchaser holds the writer (seller) of an option to the agreed contract.

Exotic options: Generic term for the more sophisticated option strategy which has features over and above the basic contracts.

Expiry date: The date on which a derivative product expires or ceases to exist. Exchange products have set expiry dates. OTC expiry dates are agreed between the principals.

Exploration drilling: Drilling done in search of new mineral deposits, on extensions of known ore deposits, or at the location of a discovery up to the time when the company decides that sufficient ore reserves are present to justify commercial exploitat

Explosive options: See knock-out options

Face value: The value of a bond that appears on the face of the bond, unless the value is otherwise specified by the issuing company.

Feasibility study: An examination of a project’s economic viability that utilizes a detailed mining plan applied to a reserve base.

Fine ounce: a troy ounce of 99.5% pure gold.

Fineness: the purity of a precious metal measured in 1,000 parts of an alloy: a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal. The American Gold Eagle is .9167 fine, which means it is 91.67% gold. A Canadian Maple Leaf has a fineness of .999, meaning that it is 99.9% pure.

Fiscal year: A corporation’s accounting year.

Floating cone: A theoretical open pit mining plan generated by an algorithm to determine the maximum economic potential for a given set of assumptions such as a USD $700/ oz gold price.

Flotation circuit: A process used to recover sulphide ore by separating it from waste material. It works on the basis of differences in density between ore and waste material. Flotation circuits can be run sequentially to separate one ore type and then an

Forward costs: The operating and capital costs that will be incurred in any future production of a commodity from in-place reserves. Included are costs for labor, materials, power and fuel, royalties, payroll taxes, insurance, and general and administrat

Forward starts: Options that are paid for upfront but are only received at a pre-agreed future date. The buyer, after the pre-determined date can at no extra cost receive an option with the usual life length but at a strike price that will be at-the-money

Free and open market: A market in which supply and demand are freely expressed in terms of price. Contrasts with a controlled market in which supply, demand and price may all be regulated.

Futures contract: An agreement made on an organized exchange to take or make delivery of a specific commodity or financial instrument at a set date in the future

Gamma: A measure of the instantaneous rate of change in the delta of an option based on a one-unit change on the price of the underlying commodity or asset.

Gap Options: Options that place emphasis on the role played by the strike price of a standard option. The strike price not only determines if the option is inor out-of-the-money at expiry but also the magnitude of the resultant payoff.

GOFO: Reuters screen code for the daily gold lease rates.

Gold Bug: a gold-bullish investor or one who favors a gold-backed monetary system (a gold standard).

Gold fix: The setting of the price of gold by dealers. It is the fundamental worldwide price for setting prices of gold bullion and gold-related contracts and products.

Gold loan: A means of raising capital for project financing which involves monetising gold. Feature of the mid to late 1980s.

Gold standard: a monetary system based on convertibility into gold; paper money backed and interchangeable with gold.

Gold-backed bonds: Debt raised through the capital markets issued with a gold option alternative to enhance the value/attraction of the investment.

Grade: The quantity of metal content in a given volume of rock; usually expressed in grams per tonne (g/t) and less commonly in ounces per ton (opt).

Gravity circuit: A process used to separate out heavy minerals from waste material; often used to recover particulate gold that has been mechanically liberated in the blasting, crushing, and grinding steps.

Greenstone belt: A geologic designation for a metamorphosed package of rocks usually found within Archean and Proterozoic cratons like those of Canada and often endowed with mineral deposits.

Head grade: The average grade extracted from a mine or sent to a processing facility.

Heap and leach: a method of mining, which entails dumping crushed ore onto a leach pad and using a sodium cyanide solution to chemically separate the gold. This process can be used to exploit low grade ore bodies.

Hedge: a transaction initiated with the specific intent of protecting an existing or anticipated physical market exposure from unexpected or adverse price fluctuations.

Hedging ratio: The proportion in which the option or the underlying asset or commodity needs to be traded to eliminate sensitivity to movements in the price of the underlying.

History-dependent options: Options whose outcome at expiry is dependent on the price performance of the underlying throughout the life of the option. Sometimes also called path dependent. See also history-independent options.

History-independent options: Options whose outcome is based entirely on the price of the underlying at expiration date. The price performance of the underlying during the life of the option is irrelevant. Standard European and American options are history independent. Sometimes also called path independent.  See also history-dependent options.

Hoist: A mechanical apparatus for moving material up and down a shaft for access to underground workings.

Holding company: A corporation that owns the securities of another, in most cases with voting control.

IFS: International Financial Statistics published by the International Monetary Fund.

Implied volatility: The degree of price volatilty inferred or implied from option market values. This is the only subjective component of option pricing.  Contrast actual volatility.

‘In’ barrier options: Options which are paid for at the time of the initial transaction but are not received until a specified price level (the barrier or the knock-in boundary) is broken. If the barrier is broken at some stage during the option’s life, t

Indicated resource: A portion of a resource that is sufficiently sampled to allow estimation of economic parameters; less confidence is attached to these than measured resources due to less dense sampling.

Inferred resource: A portion of a resource based on limited sampling and requiring more information to elevate to a measured or indicated resource classification.

Infill drilling: The practice of drilling additional holes between existing ones usually for the purpose of upgrading the resource category through better confidence.

In-Situ Leach mining: The recovery, by chemical leaching, of the valuable components of an ore without physical extraction of the ore from the ground. Also known as solution mining.

Institutional investor: An organization whose primary purpose is to invest its own assets or those held in trust by it for others. These include pension funds, investment companies, insurance companies, universities and banks.

Interest: Payments borrowers pay lenders for the use of their money. A corporation pays interest on its bonds to its bondholders.

In-the-money instruments: Unexpired warrants and options that are exercisable at or below the current share price.

In-the-money option: An option which has a positive intrinsic value is said to be in the money. In the case of a call, it is in-the- money when the strike price is lower than the current price. A put option is in the money when the strike price is higher

Intrinsic value (of an option): The difference between the strike price and current price of the underlying commodity.

Inverted market: A situation in which prices for future deliveries are lower than the spot price. Also known as backwardation.

Investment: The use of money for the purpose of making more money.

Investment company: A company or trust that uses its capital to invest in other companies.

Kappa: A measure of the responsiveness in the option premium to changes in price volatility of the underlying commodity or asset. Known also as the vega or lambda.

Karat (also Carat): the measure of purity for gold (i.e.24-karat: 99.99%, 18-karat: 75%, 12-karat: 50%)

Knock-out options: Exotic option whereby the contract is cancelled if the spot price breaks through an agreed price. See up-and-out puts and downand-out calls. The knock-out option is priced differently since it can explode or be cancelled while theoretic

Lambda: See kappa

Leach pad: A processing facility in which ore is placed in bulk for treatment with cyanide. As precious metals are placed into solution by the cyanide, the effluent is collected for further processing. This method is used extensively in arid open pit mini

Liabilities: All the claims against a corporation, including payable accounts, wages, salaries, dividends, taxes and fixed or long-term liabilities.

Limit down: Arbitrary price level below which trading on a Futures and Options Exchange ceases during that trading day. Imposed to prevent very sharp price declines in futures prices and are adjusted from time to time at the discretion of the Exchange. See Limits.

Limit up: Arbitrary price level above which trading on a Futures and Option Exchange ceases during that trading day. Imposed to prevent very sharp price increases in futures prices and adjusted from time to time at the discretion of the Exchange. See Limits.

Limits: Arbitrary price barriers imposed by Futures and Options Exchanges to limit severe price movements during a trading day. There are no limits in the spot market. See Limit Up and Limit Down.

Liquidation: The process of converting securities or other property into cash.

Liquidity: The ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes.

Liquidity: the quality of being readily convertible into cash.

Liquidity: The volume of business or turnover on an exchange or any market forum; can be applied to either the paper market or the physical.

Listed stock: The stock of a company that is traded on a securities exchange.

Loan draw down: Mechanism by which gold used for financing is monetised usually with a sale of gold into the spot market or delivery against a forward contract.

Locked in: Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.

Loco: Physical location of metal. Unless otherwise stated, price quotations imply delivery loco London.

Long volatility: To have been a buyer of either a put or a call option.  Contrast short volatility.

Long: To be long of a commodity or associated futures or options contract is to have been a buyer or to be a holder of physical metal. Contrast short.

Long-term contract: One or more deliveries to occur after a year following contract execution.

Lookback options: A history-dependent option where the income is reliant not only on whether the option is in-the-money at expiry, but also on the maximum or minimum price achieved by the underlying during at least some part of the option life.

Manipulation: An illegal operation.

Margin: The cash deposit against a paper contract payable as a guarantee. An initial payment is usually made and thereafter further margin requirements may have to be met depending on the performance of the contract throughout its life.

Mark to market: A regular (usually daily) re-evaluation of open positions or derivative exposures based on the closing price (midprice) (between the bid and offer prices) of the underlying commodity.

Market maker: A counterparty or bullion banker offering both bid and offer prices.

Market price: The last reported price at which the stock or bond sold.

Maturity date: Date on which options mature; when it is either exercised or it expires worthless. Also known as expiration date.

Measured resource: A portion of a resource that is sufficiently sampled to allow estimation of economic parameters; greater confidence is attached to these than indicated resources due to denser sampling.

Merger: Combination of two or more corporations.

Merrill Crowe process: A technique for recovering precious metals when there is high silver content in the ore that renders using conventional carbon adsorption impractical. Precious metals are placed into solution using cyanide and then precipitated onto

Mid price: The price between the bid (quoted by the buyer) and offer (quoted by the seller) prices.

Milling:  The processing of a metal from ore mined by conventional methods, such as underground or openpit, to separate it from the undesired material in the ore.

Milling circuit: A processing facility where ore undergoes crushing followed by physical and/or chemical treatment to extract metals and minerals.

Mine plan: An extraction schedule that details when specific ore blocks will be accessed and how much ore should be expected. Usually mine plans are optimized using computer algorithms to maximize the NPV of the project.

Mineralization: Rock containing metals in an unquantified amount.

Multiple option financing: Term used in bullion financing in which the gold loan agreement is flexible, in that the borrower can elect to make capital and interest payments in either gold or currency.

Naked options: Options granted and left unhedged or exposed to potential exercising.

National Instrument (NI) 43-101: Guidelines for mineral reserve and resource calculations set out by Canadian provincial securities commissions that use the definitions of the Canadian Institute of Mining, Metallurgy and Petroleum Mining Engineers; requires disclosure based on the advice

of a qualified person (QP) or professional geoscientist or engineer.

Net asset value (NAV): A valuation based on NPVs of individual assets and the net impact of the company’s balance sheet (i.e., incorporating working capital, debt, and in-the-money instruments).

Net present value (NPV): The total cash flow calculated in today’s dollar terms with a specified discount rate applied.

New York Futures Exchange (NYFE): A subsidiary of the New York Stock Exchange devoted to the trading of futures products.

New York Stock Exchange (NYSE): The largest organized securities market in the United States, with prices determined by public supply and demand.

Noble Metal: a metal highly resistant to oxidation and corrosion, such as gold, silver, mercury and platinum,

NYMEX: New York Mercantile Exchange. Now merged with COMEX.

NYSE Composite Index: The composite index covering price movements of all common stocks listed on the New York Stock Exchange.

Offer: The price at which a person is ready to sell. Opposed to bid, the price at which one is ready to buy.

Open outcry: Method of trading any commodity where dealers face each other in a dealing ring or pit and there is direct communication. Contrast: Screen Trading.

Optimization: The exercise of maximizing economic returns from a project through application of various mining sequences and methods; usually done with specialized software and complex algorithms to rapidly test multiple scenarios.

OTC: Over-the-counter; term used to describe an option that is written and traded through principals rather than an Exchange.

Ounce: a unit of weight. In the precious metals industry, an ounce means a troy ounce equal to 31.1035 grams.

‘Out’ barrier options: Options which are paid for immediately and exist until, during the option life, a predetermined barrier is broken, after which the options are rendered null and void – they cease to exist. If the barrier is not breached, the holder

Out-of-the-money (Option): An option that has no intrinsic value is said to be out-of-the-money. A call is out-of-the-money when the strike price is higher than the current price. A put is when the strike price is lower than the current price.

Oversold: The reverse of overbought. A single security or a market believed to have declined to an unreasonable level.

Oxide ore: Ore that either never had primary sulphide minerals or in which they have deteriorated; the ore is usually amenable to heap leaching as well as milling processes.

Penny stocks: Low-priced issues, often highly speculative, selling at less than $1 a share.

Preg-robbing: An ore characteristic consisting of active carbon that results in poor dissolution of gold in during cyanidation.

Premium: The cost which the buyer of an option pays to the writer or seller of the option; normally only a very small fraction of the value of the underlying commodity.

Principal-to-principal: Bullion transactions executed directly between the client and the bullion banks without being channelled through an exchange.  Used primarily by market participants who have actual physical transactions to complete rather than the

Put option: Option giving the purchaser the right but not the obligation to sell gold at a particular strike price.

Rally: A brisk rise following a decline in the general price level of the market, or in an individual stock.

Ramp: An inclined underground tunnel providing access for an underground mine or a road descending into an open pit.

Range forwards: Options similar to collars except that they have zero initial cost.

Reclamation: The process of restoring the surface environment to acceptable pre-existing conditions.

Reconciliation: An auditing procedure in which actual ore grades are compared with the predictive geologic model after mining has occurred. Positive reconciliation would take place when actual ore grades exceed those expected from modelling.

Reserve: A determined quantity and grade of ore and subset of a mineral resource that is demonstrated to be economically extractable usually based on a feasibility study and a mine plan; sub-categories are proven and probable based on density of sampling.

Resource: A determined quantity and grade of mineralization that is known from sampling.

Restoration: The returning of all affected groundwater to its pre-mining quality for its pre-mining use.

RHO: A measure of the instantaneous rate of change in the value of an option for a one-unit change in the relevant interest rate.

Run-of-mine (ROM): Material as it leaves the mine prior to any processing; often used to indicate ore that will go directly to a processing facility without any crushing or grinding.

Scoping study: A comprehensive evaluation of a project applying specific mining methods and sufficient to provide a financial analysis that may be used to determine whether mineral resources are classifiable as reserves.

Screen trading: Method of trading via computer screens and telephones in which there is no direct contact between dealers. Contrast: open outcry.

Settlement date: Usually the full business day after expiry date or after the closing of a contract.

Shaft: A vertical access from the surface to underground mine workings that utilizes a hoist and elevator system (contrast with adit).

Short volatility: To have been a grantor or writer of either put or call options. Contrast long volatility.

Short: To be short of a commodity or associated futures or options contract is to have been a seller. Contrast long.

Speculation: The employment of funds by a speculator. Safety of principal is a secondary factor.

Speculator: One who is willing to assume a relatively large risk in the hope of gain.

Spin off: The separation of a subsidiary or division of a corporation from its parent company by issuing shares in a new corporate entity.

Spot contract: A one-time delivery of the entire contract to occur within one year of contract execution.

Spot deferred: Hybrid forward contract offering floating interest rates and no fixed delivery. More flexible than a conventional forward, but without the cost of an option.

Spot market: a market in which delivery and payment have to be made within two working days of the transaction date.

Spot market: The immediate market where delivery obligations usually occur no more than two days after the transaction.

Spot-market price: A transaction price concluded on the spot, usually involving a specific quantity of product. This contrasts with a term-contract sale price, which obligates the seller to deliver a product at an agreed frequency and price over an exten

Stabilized contango: Forward contract historically offered by the South African Reserve Bank to the marginal SA mines. See flat-rate forward or advance premium forward.

Standard ounce: a troy ounce of 22 carat gold, 91.66% pure (11 fine ounces of gold with 1 ounce of alloy material).

Strike price: The agreed price at which the option can be exercised which will be equal to, higher or lower than the current price of the underlying.

Strip Ratio: the ratio between the volume of total waste material and the volume of gold bearing ore at the mine site

Swap: A spot sale with a simultaneous equal forward purchase of equal tonnage.  This is the definition of a gold or bullion swap which may differ from the term used by the foreign exchange markets.

Synthetic gold loan: A means of raising finance using the gold forward market but does not result in the monetising of physical metal.

Theta: A measure of the instantaneous rate of change in the value of an option for a one-unit change in the time to expiry.

Time value: Option value associated with the time left to maturity since during its life an option can move in and out of the money.

Toronto Stock Exchange (TSX): The largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalization. Based in Toronto, it is owned and operated by TSX Group for the trading of senior equities.

Trader: Individuals who buy and sell for their own accounts for short-term profit.

Troy ounces: a measure of 480 grains or 31.1 grams (1 MT = 32150.7 troy ounces).

Turnover rate: The volume of shares traded in a year as a percentage of total shares listed on an exchange, outstanding for an individual issue or held in an institutional portfolio.

Uunderlying: Shortened term for the underlying commodity upon which futures and options are traded (See Derivative Instrument).

Unlisted stock: A security not listed on a stock exchange.

Up-and-in calls: A barrier option where the call is paid for at the time of transaction but is not received until the predetermined knock-in barrier is reached.  Differs from down-and-in calls in that the price of the underlying is initially below the bar

Up-and-in puts: A barrier option where the put is paid for immediately but is not received until the predetermined knock-in barrier is reached. Differs from down-and-in puts in that the price of the underlying is initially below the barrier.

Up-and-out calls: A barrier option where the standard calls are paid for immediately exist until such time as the price of the underlying rises above a predetermined barrier after which the options cease to exist.

Up-and-out puts: A barrier option where the standard options are paid for immediately and exist until such time as the price of the underlying rises above the predetermined barrier, after which the options cease to exist.

Vega: see kappa

Volatility: The rate of change in the price of the underlying commodity. See actual volatility and implied volatility.

Volume: The number of shares or contracts traded in a security or an entire market during a given period.

Warrant: Option attached usually to a bond issue designed to give the holder a highly leveraged exposure to the underlying commodity.

When issued: A short form of “when, as and if issued.” The term indicates a conditional transaction in a security authorized for issuance but not as yet actually issued.

Window options: Suite of history-dependent exotic options in which preagreed parameters are valid only for an agreed period of time within the option life.

Working control: Theoretically, ownership of 51% of a company’s voting stock is necessary to exercise control.

Writing options: Selling someone else the right to buy or sell gold at a particular price.

Yield : Also known as return. The dividends or interest paid by a company expressed as a percentage of the current price.

Zero cost collar: See collars.

10K report: Set of audited annual accounts published and issued to shareholders.  Differs from an annual report only in detail.