"Because all contained metal is ultimately sold to Freepoint on the basis of the pre-advised monthly average, the intention of the QP hedging strategy will be to ensure that hedges executed, will be done so on the basis that they will be closed out against the same price average at which the contained metal is priced. In this way the actual net price received through the combination of the smelter contract and the hedge contract will be the hedge price.
Under the terms of “Offtake agreement”, the final price averaging period is either the calendar month prior to the month of scheduled shipment (MPMSS) or 5 months after the month of ship arrival (5MAMA – also known as spread adjusted under the offtake agreement), dependent upon determination by Freepoint."
Nothing particularly untoward....
HGO Price at posting:
3.2¢ Sentiment: None Disclosure: Held
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