“Real” Collars In Place For 2025As we have noted several times now, there is a big difference between simply using "put" options to secure a minimum price for production and utilizing true "collars" for similar results. Currently, through the end of 2024, only "put" options are being used to protect the downside of production. According to the Q1 earnings report, this will change in 2025. Specifically, starting on January 01, 2025, "real" collars will be in place. A minimum of $4.00 US will be procured on 108M pounds for the year. In return, a cap on that amount between $5.00 - $5.40 (on a sliding scale) is also in place. Now, can't say that we totally love this "hedging strategy" BUT we do understand why they're doing so. Locking in a minimum of $4 US while Florence is under construction is a favorable situation. Obviously, everyone will be going nuts if copper really goes ballistic far over $5.40...but really... the odds of that are pretty low. Why? The majority of "experts" aren't expecting large Cu shortages until 2026 and beyond. Further, the demand side of the equation is currently underwhelming and doubtful to explode anytime soon due to an overall world economy suffering from high inflation and maybe even the dreaded stagflation scenario. So, all in all, ensuring Florence has that $4 minimum cash coming in further de-risks the project going forward. As far as the Q1 total report goes, still digesting the whole thing. At a glance, considering the maintenance downtime, production results are pretty solid. Definitely don't like that C1 number but hey, it is Ole Gib, right? More to come after the conference call tomorrow.