jant, you misunderstand how hedging works. it is on obligation to sell future production at an agreed fixed price, but it is still a sale generating revenue.
quote
{The Company has 1.8Mozs of silver hedging in place at an average price of A$29.60/oz maturing in 10 quarterly instalments. The first quarterly tranche of 180,000 ounces matures in December 2012.}
It means if the silver price is higher, CCU loses the opportunity to sell at higher spot prices. However if the spot silver price if lower than A$29.60, CCU gains the advantage.
Hence every quarter, a portion of production is sold at the agreed fixed price. I don't know where you get the impression that 720,000oz is given away - as this is not the case under the above hedging agreement.
720,000oz per annum hedge obligation was supposed to be less than 30% of production, so opportunity costs will be being factored into estimated earnings now using a higher % of a lower annual production.
- Forums
- ASX - By Stock
- CCU
- get a grip
get a grip, page-67
-
-
- There are more pages in this discussion • 9 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)