RE:RE:RE:RE:RE:RE:RE:Looking good goin forward I asked the question of the timing of such payments to Macquarie (hedge strategy done with them). My guess was that the settlement was linked to the sell of Gold by VIT, not at fixed date. Would make sense in order to have the necessary cash and to determine the execution price.
The hedged has just capped the sell price at C$ 1936 on 40K oz production. DOT. Necessary hedge for junior gold Cie building a mine. The total hedge 2020-2021 is about half year of production. And it is not like selling at cost the Gold produced.. selling it at 1936 CAD... so let's says with a 1000 CAD margin.
Truly a good problem to have :-)
I am not in the Gold industry, but I would rule out hedging even more production as current price with a similar strategy.. Yes, personnally I would not mind having the next 2 years of production in a boundary 2100-2300 CAD for example (buy put 2100-sell call 2300)
BUT :
I should take into consideration is the fact that revenues are in USD, and cost 70% in CAD... So heding the POG would have a negative effect as it decrease the natural hedge of the USD currency...
Indeed, weaker USD means less revenue for VIT.. but at the same time, weaker USD should translate in higher POG.. So in other terms, hedging the POG would not be a good idea if POG goes higher due to USD weakness,