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Harte Gold Corp. T.HRT


Primary Symbol: HRTFF

Harte Gold Corp is engaged in the acquisition and exploration of mineral resource properties. It is focused on gold properties located in the province of Ontario, Canada. The company's exploration projects consist of sugar zone property and Stoughton Abitibi property. The Sugar Zone Property is located approximately 80 kilometers east of the Hemlo gold camp on the north shore of Lake Superior. It includes approximately 4 mining leases and 336 unpatented mining claims. In addition, it also consists of approximately 29,435 hectares within the Sault Ste. The Stoughton Abitibi property is located approximately 110 kilometers east of Timmins and 50 kilometers northeast of Kirkland Lake.


EXPM:HRTFF - Post by User

Bullboard Posts
Comment by MudCreekeron Jul 25, 2020 12:41am
129 Views
Post# 31318093

RE:Hedge Cost US$7.325 million

RE:Hedge Cost US$7.325 million

BigIsBest, I suggest you read the "Derivative Financial Instruments" Section of the Q1 financial statements.  I believe you misunderstand at least two points.  Buy vs Sell, and Broker vs BNP. 

This quote from that section might get you started toward what I believe is a correct interpretation of these swaps.  "During the three months ended March 31, 2020, 4,235.1 gold call options were exercised by BNP and the Company paid BNP $0.7 million".  

They did not buy $1390 call options from a broker, as you suggest.  Rather, they sold $1390 call options to BNP (hence BNP gets to exercise those options).   In exchange, BNP sold them an equal number of put options at $1300 for the same price.  They are called "zero cost" because the two sets of options were priced the same at the time, so no money changed hands then. 

I know it's complicated, but that section of the financial statements spells it out.  I expect the $0.7 million number mentioned in the bit I quoted will be more like $2.0 million Q2 given the rise in gold price.

BTW, if the most they could lose was $99 per ounce, as you suggest, how did they lose $700,000 on 4235 ounces in Q1?  That's $165 per ounce.

Of course I could be completely wrong.  Wouldn't be the first time.  If so, please educate me.

Bullboard Posts