The raise was forced. We wouldn't have done it otherwise - a desperate need of short term cash (if the lender demanded hedges be bought back early, due to breaking loan covenants).
So it's not entirely implausible that they'd do a buy-back. But it would be embarrassing, so I think they won't.
Buying back hedges would be a 'bet' on the gold price and a buy-back of shares could have a higher expected ROI.
But if not wanting to buy-back hedges, then holding a large buffer cash balance makes sense (as safety against the hedges). To have a low cash balance would risk us becoming desperate again.
They'd have a number in mind that they want to be holding in the bank by December. Enough that we can repay the debt, and cover any 'missed guidance' during the hedged period.
If we're on track to surpass that number easily, then a buy-back would not be a bad idea. Though any potential acquirers wouldn't like it (if the buy-back drives up the price, it'd make people less likely to accept their offer). So that's another reason why they'll likely not do it in the short term.
+$65m was very good. Another quarter of that would be great. If we're still ramping up, then it seems possible (even possible to surpass it).
BGL Price at posting:
91.5¢ Sentiment: Buy Disclosure: Held
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