Hey desert, appreciate the input, particularly regarding hedging, though... there are other ways to provide some logical downside protection when you are a high cost producer (much easier to not hedge when you are able to survive high/low price cycles because you assets are, well, the best in the sector.
WGX have already shown they are averse to more hedging, but.... are willing to add low cost collars (minimum $2700, max $3300 AUD) that do limit upside somewhat, but, also reduce the downside. I would rather they pay for just clean options that don't have to be used at all. Basically insurance, which... most long term businesses utilize.
WB has stated they are indeed looking to return capital to it's shareholders, though it would help if the share price is above the old capital raising price before doing so (from memory, it was $2:10?).
@wassa - again appreciate the reply. I do agree that WB and the board are playing their cards close to their chest regarding their strategic goals.
I do think WB explained pretty clearly why MGVs high grade open pits were worth bidding for, as he believed he could be mining them within 9 months. A nice sugar hit adding 40-50k p.a for a couple of years. WGX is after near term, profitable ounces. I am in no way saying MGVs ounces were cheap, but... they would have been quickly brought into the mine plan.
Without doubt, if WB has become MD 2 years earlier, the whole company would likely be different. Perhaps 1 of the plants would have already been moved/replaced. I also agree, that their 3 plants are not optimal, but... they are making money now (hopefully lots), and are going to see costs reduce with the new fuel reduction measures in place, plus, higher grades going into the plants.
Your last sentence was true, but... I do think WGX is changing for the better. Less ounces, but more profitable ones. Yes, a higher POG has made a big difference, plus the change in hedging, but.. the hedging was a choice, RMS is paying out the nose for their extra conservative positions.
I def think WGX dirt has just as much of a chance at finding a Never Never, as... do SPR. But... literally years and years have passed since WGX sent any rigs to investigate any of their own targets.
Enjoy the Keith report, all of them are interesting, feel free to lose a couple of evenings here:
Eagle Res All reportsHave not read them all (most... though to be fair, I have been looking at them for at least a decade).
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