Maiden gold bar was produced in September 2019. By my reckoning...

Maiden gold bar was produced in September 2019. By my reckoning there have been 3 periods of hedging since production began at Jaurdi since then, excluding the latest hedge opened in January 2023. I have the hedge records on hand and happy to share what I estimated the results were at the time, which were based on the monthly average bid price from Perth mint.

The first hedge occured during early production and provided security for the company as it worked toward becoming debt free and to begin paying a dividend. With circa $18m in debt owed this made some sense. The hedge was for 5,000oz from February 2020 through to June 2020 at $2331 per oz, and an additional 2,000oz from July 2020 to August 2020 at $2475oz. However, this turned out to be a disaster as COVID19 hit not long after and we took a bath on this as spot gold soared to all-time highs and we missed out on $1,523,133 of profit. But who could have seen that coming in January 2020. Unlucky.

	Month	Perth Mint Avg Bid Price	BCN Hedge Price	Hedged Oz	Delta BCN v Spot	Value
1	Feb-20	$2,396	$2,331	1,000	-$65	-$65,400
2	Mar-20	$2,562	$2,331	1,000	-$231	-$231,491
3	Apr-20	$2,668	$2,331	1,000	-$337	-$336,736
4	May-20	$2,635	$2,331	1,000	-$304	-$303,692
5	Jun-20	$2,511	$2,331	1,000	-$180	-$179,769
6	Jul-20	$2,619	$2,475	1,000	-$144	-$144,087
7	Aug-20	$2,737	$2,475	1,000	-$262	-$261,959
8	Total			7,000		-$1,523,133

The second set of hedging was for 9,000oz in June 2021 through to November 2021 at a mix of monthly prices which averaged $2418oz across the period at 1,500oz per month.Again things did not go so well, although not as badly as the first one and resulted in missed profits to the company of around $138,936 had the company simply remained unhedged. The rationale for this hedging was just because of general market uncertainty but the results were a bit of a nothing in the end, although it probably does represent something in the vacinity of a decent analysts annual salary.

	Month	Perth Mint Avg Bid Price	BCN Hedge Price	Hedged Oz	Delta BCN v Spot	Value
1	Jun-21	$2,400	$2,427	1,500	$27	$41,145
2	Jul-21	$2,435	$2,423	1,500	-$12	-$18,614
3	Aug-21	$2,443	$2,419	1,500	-$24	-$36,063
4	Sep-21	$2,429	$2,416	1,500	-$13	-$19,647
5	Oct-21	$2,398	$2,414	1,500	$16	$23,992
6	Nov-21	$2,493	$2,407	1,500	-$86	-$129,749
7	Total			9,000		-$138,936

The third hedge occurred in March 2022, which was again for 9,000oz for the period March 2022 through to August 2022 at $2715oz. And although there was much bleating after an initial spike in the price, the company did in fact record a profit on that hedge and closed it out early, only a matter of weeks after it was opened. The early closing meant some opportunity was missed, but ultimately that decision to hedge was profitable - and more bleating ensued. The company posted a $672,000 profit on that trade which appears to have been a pure paper transaction, however they could have posted $1,065,706 had we seen the contract through.

	Month	Perth Mint Avg Bid Price	BCN Hedge Price	Hedged Oz	Delta BCN v Spot	Value
1	Mar-22	$2,642	$2,715	1,500	$73	$109,604
2	Apr-22	$2,627	$2,715	1,500	$88	$132,412
3	May-22	$2,622	$2,715	1,500	$93	$139,333
4	Jun-22	$2,620	$2,715	1,500	$95	$142,063
5	Jul-22	$2,533	$2,715	1,500	$182	$272,437
6	Aug-22	$2,535	$2,715	1,500	$180	$269,856
7	Total			9,000		$1,065,706

The latest hedge is for 6,000oz at $2729oz for the period February 2023 to April 2023. This arguably occurs at a time when we investors (gamblers?) are bullish on gold and are seeing the POG rapidly rise the last few nights hitting $2800 aud last night. But isn't gold always about to explode in our eyes? I don't begrudge management for taking some security, but I think historically the numbers suggest we are better off focusing on what we do well - producing low-grade gold at a good profit. I contend that the shorter timeframe on this hedge is a slight nod to that fact, but the high price of $2729 aud oz was just too tantalizing for our BOD to refuse. Worth noting that much of the variability in the POG (aud) the last few nights has been generated by the declining Aussie dollar, and not the rise in POG (usd) which is possibly looking to consolidate around these GFC historic highs, and there is currently a potential trend reversal playing out in USD/AUD. Best not to fret the day-to-day of the hedge as it is what it is, and it shouldn't suprise anyone to see management doing it as there is a history of it. For what it's worth, were the entire hedge period to play out at current spot of $2786 it would result in a lost profit of $426,000.

Summary of hedge activity:

2020 - Lost profits of around $1,523,133
2021 - Lost profits of around $138,936
2022 - Gained profits of $672,000 (with a missed opportunity on an addtional $393,706)
Total - Lost profits of $990,069 (with a missed opportunity on an additional $393,706)