Just wondering, it states the expiry for the 20,000 ounces hedged is August 2nd. Does that mean it must be fulfilled by then? Interesting choice with the 20,000 ounce put option at $1575 AUD. My guess is that this put would not have cost a lot due to the current price being a lot higher. I think its extremely prudent for the first 6-12 months. Yes it costs money, but then, that is the nature of insurance.
I would even prefer if BLK continue to buy more puts of this nature, as it means that worst case they are very protected to the down side (and can plan accordingly budget wise). The puts allow them to use it., or not. If the POG is way above $1575 then don't, or... heaven forbid, they have issues with production and cannot meet the put options (no risk unlike hedged contracts). AUD $1575 is a decent price if the US FED and others are able to manipulate the price lower.... Hedges are a different matter, you either supply the gold, or you have to buy it on market and fulfill the contract. Much more risky IMHO.
The other challenge with hedges, is because the price of GOLD is fluctuating so much, i.e... like right now, AUD price is up $30 is just a couple of hours, you are almost never going to get the highest price.
Lastly, if as per my first question, BLK is looking to produce 20k ounce before August, then they must be very confident that they are way ahead of schedule?? Or... is it more likely that they first part of the hedge would need to be fulfilled, i.e... they mention 6 months, so... 20/6 = 3.3k ounces per month?
For those who remember ages back when I was less positive on BLK, I have bought a couple over recent months.
Good luck to all holders.
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