Buy: Metminco Binary Hedging at Play

Less than a week to go before the previous owners of the Colombian Gold Deposit (Miraflores) clear the transaction for complete 100% ownership of a series of gold deposits that have already had $29m sunk on exploration!

With the copper market stuck at $2.00/lb the timing of the gold project acquisition looks very lucky. First bit of luck in a long time. Why luck with this gold project when gold could tank lower? With Total Cash Costs of $682/oz subject to a further improvement according to the company down to $625/oz the differential is very competitive against existing producers in the Tier 1 and Tier 2 bracket In My Humble Opinion. This ultimately is the biggest positive for me, holding 44.6m shares, why put money into two separate companies? I would rather invest and stay here with the hedging strategy.

Hedging at its best:
Good times and markets, copper prices improve and thereby Los Calatos economics strengthen.

If gold is the mitigation risk in a weak and uncertain market the company should do well in both circumstances IMHO, hence the hedging via polar and binary commodities might be incredibly valuable!

If they can sell a large stake of this $447m deposit of the red stuff that could be very worthy indeed. We as Metminco investors could retain a small carry percentage for future upside post Bankable Feasibility Study. As for cash the cash is the question, how much A$ for how much percent stake in Metminco? I would support a 65% sell off at US$60m with the 35% retained as a significant holding for future appreciations of this world leading deposit - again IMHO.

Where are we with the "well advanced" discussions with other parties?
Awaiting with conviction here for me!