Juniors do not hold derivative. Rather they have subordinated the
percentage of the property they have to the production loan. The
production loan has a embedded short of gold derivative. Therefore the
junior has their percentage of the derivative loss equal to their
percentage of the property. To make it simple call your junior and ask
the following question. Does the major you are dealing with have a
recourse or non recourse loan for development. If they answer non
recourse then your junior has a derviative risk even if they are so
stupid as not to know it. RY, Jim


from a copy of an email to a poster at:
http://2cents.dailyreckoning.com/viewtopic.php?p=221123#221123