The original hedge agreement was for 170,000 oz @ $700 for delivery between march 08 and dec 2011, of which 60,000 oz can be sold above $700/oz with benefit to the company.
When I put together my model of ALD I calculated the fixed component of the hedge at 28,800 oz pa and assumed that all production oz above that figure would be sold at close to spot price.
The fraction that relates to the 60,000 oz hedge component will benefit the company - but not too the full extent as that of the unhedged component.
ie
28,800 at hedge pa
15,000 at spot pa with company partially benefiting
All the rest (approx 40,000 pa) at spot with full benefit.
CPDLC
The original hedge agreement was for 170,000 oz @ $700 for...
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$32.66 |
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Mkt cap ! $7.782B | |||
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