EXPM:HRTFF - Post by User
Post by
BigIsBeston Jul 24, 2020 7:14pm
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Post# 31317327
Hedge Cost US$7.325 million
Hedge Cost US$7.325 millionI think this discussion topic is way off the mark. I don't know if it is deliberate disinformation or a lack of research but some additional facts will help. My understanding is:
Harte entered into a gold hedge program using zero cost dollar swaps for approximately 74,000 ounces. What Harte did was to enter into gold put options and gold call options. The put (i.e. sell) options were at US$1,300. But they also set up call (i.e. purchase) options at between US$1,391 to US$1,399 for all 74,000 ounces.
Therefore, the most the hedge program can cost Harte is US$99 per ounce! The total cost is capped at US$7.325m
It is also important to note that these options will be bought and sold through brokers – it is extremely unlikely that BNP makes anything extra out of these options.
Putting it another way, once the gold price went past US$1,399 all the increases from that point are available to Harte.
Our problem is getting the gold out of the ground much more cheaply. Management must prove that they can do that. Once they do then the HRT share price will respond, including factoring in the surging gold price.
Patience is required (still).