I am very happy to accept that I double counted 29 Koz of hedge for Investec since it means those ozs can be sold at spot, which given today's POG, gives MOY even more M$ of income.
I should also acknowledge that my valuation is broad-brush in that by applying the margin at a single gold price without recognising the hedging at a lower price, I have under stated the EV to Gross Earnings which is therefore higher than the 1.6 that I gave. Using 39 Koz hedged at $1796/oz and the balance of estimated annual production at $2200/oz, I get an adjusted EV to Gross Earnings of 2.1. I use the measure as one of several for screening stocks for value and do not go to the effort of including hedging. Better I include hedging, I agree but keeping track of this across a large number of stocks does increase the effort required.
MOY Price at posting:
11.0¢ Sentiment: None Disclosure: Held
