hedging
VGCX shares an up-to-date summary of the hedging they have in place for 2023-2024.
Compared to end September numbers, they added:
- 1000 oz/month forward sales @ 2025 for 12M (+12'000 oz hedging)
- they bought put (option to sell Gold oz) : 3000 oz/month @ $1800 for 12M (+36'000)
So all together:
a) They sold forward 34'500 oz for 2024 at an average price of 2057
b) they can sell 3K per month at 1800 USD if price goes below this strike.
Question : how much did they pay for the put optiions. I hope they did not buy them when XAU price was "depressed" at 1850 USD and I hope they won't exercice them in 2024 (:-) ) I hope as well that the premium paid wasn't too high (fx volatility, spot price, time to maturity)
They must be quite confident that they generate cash flow to buy put instead of selling forward the production.
But it is wise to have a mix as the put protection does not cap the gains in case of huge POG jump. The protection is already paid.
They protected 3M usd per month at 1.3680.
Link to the youtube presentation Frankfurt Goldmesse
One of Canada's Newest Gold Mines | Victoria Gold Corp. - YouTube