should pem buy back shares with hedge fund, page-7

If PEm sold out its hedge, it would have to spend its money on Mt Oxide, because MT Oxide is the only way it will make a return on that money. However, Mt Oxide is not like a wad of cash sitting in the bank. It is a complex, expensive, long lead time underground mining proposition, or a theoretical cutback the size of Omaha. No mill, no Reserves, major investment needed.

Either PEM goes debt, or it ties up with a copper miner - Aditya Birla, Straits, Xstrata, etc all fit the bill - and it exchanges project equity for a free carried Joint Venture and de-risks itself.

I think that selling an in-the-money hedge would be retarded. In act, the hedge itself and the cash would possibly be attractive bargaining chips in a merger with a clapped out, unhedged zinc miner which is screaming and dying. CBH, lets say. PEM holds the cards - a mill at the Hill, a hedge to save grace, and management which aren't buffoons.

De-hedging is something you do when your hedges are low and you bet on the price of the commodity going up. Gold, for instance.