We have $50m net cash, but that is $150m cash $100m debt, and...

We have $50m net cash, but that is $150m cash $100m debt, and the debt not due for quite a while.

So removing some hedges would not really impact our ability to repay the loan (as we'd have a longer period of unhedged production before the loan came due). It would only restrict us from spending the cash on something else, like the plant or the mine growth.


However, the lender required the hedges be put in place. That means we can't just buy them out, or we'd no longer be meeting the hedging requirement.


If we repaid the loan, then we'd be free to pay out the hedges, but that would be $150m just to start. $100m for the loan, $50m for some hedges, leaving us with $0 safety net.

If we instead repaid $50m of the loan, and $50m of hedges (so that the hedging is still proportionate to the outstanding loan), then the lender may give the go ahead, but may charge additional fees.



Maybe more realistic: wait until we hit $200m cash (next quarter?). We can get rid of the loan, spend $50m on hedges (no MQG fees), and still have $50m to work with. $50m cash balance and no credit facility would be a little risky (in case of a large mine issue, or large gold pull back), but it would be less risky than previously, since it would be unhedged production with a high margin. $2000-3000 AISC vs $5000 gold.