There are some greedy piglet goldiebugs out there that can only see the upside, and never learn.
If the AUD POG fell under about 1300 (ie USD 1080 assuming an exchange rate of 80 cents) they would not be in a position to repay the USD75m Red Kite loan or the main debt facility of USD250m. Hedging 60% of production for 12 months from 1 July 2015 at AUD1600 would give assurance that the company can survive. In 12 months time the gold may be higher in which case they could again hedge 60% of production and capture more upside.
Hedging is essential for companies that have large borrowings such as SBM, and it helped hold up the share prices of EVN and BDR in 2013 when the gold price collapsed.
If SBM had taken out hedging with its borrowings in 2012 it would have been at over AUD1600 and made an important contribution to supporting the share price.
It is fun gambling on the gold price always going up fairy tale.
loki (just another mug punter)
SBM, page-58
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Last
21.5¢ |
Change
-0.005(2.27%) |
Mkt cap ! $175.8M | |||
| Open | High | Low | Value | Volume |
| 21.5¢ | 22.5¢ | 21.0¢ | $697.2K | 3.215M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 25 | 1159530 | 21.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 22.0¢ | 67000 | 1 |
View Market Depth
| Last trade - 16.10pm 09/07/2024 (20 minute delay) ? |
| SBM (ASX) Chart |