Gold miners: Investors keep a beady eye on hedge books
Locking in that high rand gold price is a fantastic way to boost cash flow and the bottom line. But get it wrong?
If there is one guarantee in gold mining it’s that hedging or selling the metal forward at agreed prices can make companies look like gifted heroes or just a little silly.
Hedging is a way to lock in prices and is very helpful when it comes to building projects or expansions, giving banks the confidence that there’s a guaranteed return on the gold sold.
For the finance department in the company itself, it’s a way to get a firm handle on revenue inflows, which is handy when dealing with large debt loads and new projects ramping up into full production...