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CAI Valuation - comparison to peers, page-179

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14/02/24

18:22

Post #: 72408504
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Originally posted by Contrarian4me: ↑

I don't think it works that way. The reason the bank forces the hedge when loaning money is because they don't want to gamble on the gold price. I would imagine that Macquarie is purely taking delivery of the gold to forward to the actual buyer on the other side of the contract at $2,350 oz for a brokerage fee. Perhaps someone knows for sure.

Macquarie however may have guaranteed CAI's delivery to the other side of the contract however at $2,350 oz which if the case, would be a reason for Macquarie to not want Calidus to go under. If this was the case, Macquarie would have to buy at spot $3,000 say to sell to deliver the hedge at $2,350 oz, thus losing $650 per oz for the remainder of the hedge.

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Agree, it is hard to know the details of the how the hedge is structured. However Macquarie will be exposed to the loan, and are also a shareholder, so definitely have considerable skin in the game.

All IMO.

CAI Price at posting: 14.5¢ Sentiment: Buy Disclosure: Held
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