RE:TV Hedging Arrangements ABCing, it is best to ignore Caribou completely. Caribou is fully hedged, and the company might be able to make $.05 to $.10 profit per pound from Caribou. With production expected to be at 60M pounds per year, Trevali might eke $3M to $6M of profit out of Caribou per year. If they had waited until zinc was $1.35, they could have made $.15 to $.20 per pound, or $9M to $12M profit per year. With the current arrangement, Caribou might add about $1M profit per quarter which is close to insignificant.
The remaining 260M pounds per year is only 25% hedged, so there is still some decent up side. That yields 195M pounds per year unhedged. Every $.10 increase in the price of zinc should add $19M to profits.