IMO their hedging is not so bad. Look at the average price realized last quarter. It was $2,000 per oz. One of the highest in the industry. They also had 23,815oz of unsold gold which they subsequently sold in October.
While the hedge price is not ideal, the hedging is somewhat flexible and they are working it off slowly and mostly selling into the spot deferred contracts.
From their last Quarterly:
"Hedging The Company delivered gold into a combination of spot deferred contracts and at the prevailing spot price during the September 2019 quarter. The total hedging position at the end of the September quarter was 438,510 ounces, down from 451,514 ounces at the end of the June quarter with an increase in the average delivery price from $1,611 per ounce at the end of June to $1,615 per ounce at the end of the September quarter. These hedges are all on a spot deferred basis, meaning there is no fixed maturity date obligating a sale. As previously noted Regis is undertaking a strategy to reduce the exposure to approximately 200,000 ounces of its lowest priced hedges. It is doing this by delivering into these hedges at a rate of at least 10,000 ounces per quarter. The Company plans to continue this approach for the near future. Factors that may drive a review of this approach include the prevailing AUD gold price, Company cash balances and potential upcoming capital requirements."
"During the quarter, Regis sold 71,702 ounces of gold at an average price of $2,000 per ounce compared to 106,628 ounces at $1,832 per ounce in the June 2019 quarter. Physical gold sales were lower than the previous quarter due to the timing of gold deliveries at the end of the month which resulted in a significant increase in gold on hand at the end of the September quarter. There was a total of 23,815 ounces of gold on hand at the end of the quarter which was subsequently sold in October 2019."
Gold had a great recovery overnight so I am hoping Monday will bring some buying in the sector though recently there is little buying on gold going up and big selling on gold going down across the industry. Pretty frustrating.
This is only in my opinion, not offered or to be taken as financial advice. Not recommendation. Do your own research.
RRL Price at posting:
$4.12 Sentiment: None Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)