I didn't hypothetise that copper will end up at US$2.50/lb.
What I did say is that it is unreasonable to base your valuations assuming copper price to be 20% higher than the spot price. And I went on to say that depending on what happens to the world economy, you could see anything from $2.50 to $5.00. And that picking exactly what copper prices are likely to be is highly uncertain.
And even with 50%+ hedging, valuing HGO and other producers is very sensitive to what your copper price assumptions are.
Nothing controversial there, surely? It is just that we live in a very volatile time where commodity and equity markets tends to whip-saw violently. (As we saw last night).
Good luck picking the copper price for tomorrow or next week, let alone 2012 and beyond.
Yaq
HGO Price at posting:
20.0¢ Sentiment: Hold Disclosure: Held
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