My understanding of how hedges work.... At the time the 125,000...

My understanding of how hedges work....

At the time the 125,000 ozs were hedged Macquarie (or whoever) short sold that amount (which immediately offsets Mac's exposure). CAI has to supply that gold to cover the short sale. There is an interest component built into the hedge agreement (since CAI has effectively borrowed 125,000 ozs to secure the debt with Mac).
Rolling the hedge forward (or some % of it) can be done but there will be a financial penalty involved... preferable is renegotiating the payment schedule with Mac.