Chart - MCR, page-860

Glad I got into that conversation re hedging yesterday. It only really gelled with me overnight what the real issue is there. Not a vanilla case of hedging a lot at a crap rate because the bank obliged them to (which happens way too often). It’s as you’ve alluded to - hedging a target that isn’t met and therefore being overhedged, which bizarrely means the company is short Nickel and lose money if the Nickel price runs higher.

If you overlay that with the ramifications of how far the Ni price rallied this time last year you get a fairly scary scenario. So yeah, that’s a massive blight on previous management to put the company in a position like that, so seems feasible that it may have contributed to the changeover.

Interestingly the decision to NOT unwind the hedges by current management has proved up well (Nickel has drifted lower in the interim). Might be wise to think about doing something on that front whilst the opportunity to do at a better level exists. If they navigate their way around this issue well it will be a massive tick for current management imo.