Does anyone know if MDL has FX hedging in place? I have had a good look at their announcements and it looks like they hedged their gold back in August but not their FX. My read is that the USD861 per ounce that they hedged is now worth about AUD 1,300 per ounce, whereas it was worth less than AUD1,000 per ounce back in August. Of course their loan repayments and costs are mostly in USD, but assuming they have no FX hedging, their profits benefit from the recent FX market movement. When converted back to AUD for the benefit of their shareholders, they are going to be a lot more than originally thought. Another way of looking at it is that they raised capital in AUD when the AUD was strong, invested that capital in USD assets over in Senegal, and when they repatriate that USD capital back to AUD by way of profits (or sale of the mine), its worth much more due to the favourable exchange rate move.
Have I missed something? If not, why is the share price where it is?
MDL Price at posting:
$1.86 Sentiment: None Disclosure: Not Held
