TSXV:CAV.H - Post by User
Comment by
lemonfruitson Oct 25, 2007 8:51am
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Post# 13685649
RE: Hedging
RE: Hedginggood recap from simplythefacts.
Hedging isn't limited to copper and isn't limited to BAJ.to either. Have a look at BVN to see how hedging affected its results from 2002 to 2006, and have a look at PD (now FCX) to see what hedging can do to copper revenues.
But remember, BVN and PD/FCX are big companies who were producing at the time and had cash and everything. They could choose whether to hedge or not. And also, the price of copper/gold etc shot up quickly from a just-profitable level to today's very very profitable prices.
The main points with BAJ is (to back up the previous good post):
1) they need to hedge to ensure the money from the banks. No way round this except for diluting the company to merry hell and screwing everybody.
2) the hedge is not a big one (up to 50% of copper production for 5 years) and will make BAJ a LOT of money, no matter what the price of coper does later.
3) Hommel really doesn't know what he's talking about. Read his articles with a bit of background experience and they are laughable. A little knowledge is a dangerous thing.