Our Company
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| Hedge Policy and Position |
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Hedge Policy and Position
Hedging Policy and Position
Condestable
The hedging has been executed using a zero cost collar hedging strategy whereby positions have been entered into to achieve a minimum hedge price and a maximum hedge price. This ensures that Condestable will realize a minimum price of $6,500 per FMT of copper and market price participation up to $8,760 per FMT of copper. There is no cost to the Company for this collar hedging strategy.
This hedging requirement is at a reasonable level of approximately 25% of forecast payable copper production from February 2012 to March 2013. During this period Condestable will realize the market copper price on the hedged copper volume so long as the market copper price is within the collar price range. The remaining 75% un-hedged copper volume will be fully exposed to copper market price fluctuations. The Company has no plans to hedge additional copper production at Condestable.
Existing and proposed hedging as of April 6, 2010 is set out in the following table:
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2010 S1 |
2010 S2 |
2011 S1 |
2011 S2 |
2012 S1 |
2012 S2 |
2013 S1 |
TOTAL |
| Existing Hedging Volumes |
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| Cu Forwards |
FMT |
10,200 |
10,275 |
10,275 |
10,350 |
1,750 |
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42,850 |
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| Cu price |
USD/t |
4,419 |
4,419 |
3,583 |
3,408 |
3,408 |
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3,933 |
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| New Collar Hedging Volumes |
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| Copper |
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| Volume |
FMT |
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2,500 |
3,000 |
1,500 |
7,000 |
| Minimum price |
USD/t |
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6,500 |
6,500 |
6,500 |
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| Maximum price |
USD/t |
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8,760 |
8,760 |
8,760 |
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| Cu % hedged |
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82% |
83% |
83% |
83% |
34% |
24% |
24% |
62% | Aguas Tenidas
As of April 12, 2010, the hedging program for Aguas Tenidas Mine is as follows:
Additional commodity hedging has been executed and, together with the restructured commodity hedges, the new MATSA hedging program is set out in the following table.
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2010 |
2011 |
2012 |
2013 |
TOTAL |
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| Restructured Hedging Volumes |
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| Zn Forwards |
FMT |
4,959 |
16,848 |
4,896 |
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26,703 |
| Zn Price |
USD/t |
1,630 |
1,601 |
1,579 |
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1,603 |
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| Cu Forwards |
FMT |
4,104 |
16,002 |
396 |
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20,502 |
| Cu Price |
USD/t |
4,300 |
4,216 |
4,160 |
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4,232 |
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| Zn Short Call |
FMT |
4,900 |
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4,900 |
| Zn Strike Price |
USD/t |
1,500 |
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1,500 |
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| Cu Short Call |
FMT |
6,100 |
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6,100 |
| Cu Strike Price |
USD/t |
4,200 |
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4,200 |
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| New Hedging Volumes |
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| Zn Forwards |
FMT |
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8,550 |
1,125 |
9,675 |
| Zn Price |
USD/t |
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2,307 |
2,272 |
2,303 |
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| Cu Forwards |
FMT |
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3,600 |
17,100 |
1,800 |
22,500 |
| Cu Price |
USD/t |
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7,768 |
7,471 |
7,319 |
7,507 |
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| Zn % Hedged |
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29% |
39% |
33% |
2% |
25% |
| Cu % Hedged |
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44% |
66% |
58% |
6% |
44% |
There shall be no margin calls or other collateral delivery obligations under the required hedging program.
Also in connection with the terms of the Senior Facility, MATSA has restructured its Euro/USD foreign exchange forward contracts, summarized as follows:
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2010 – sale of US$ 84 million at 1.43;
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2011 – sale of US$ 34 million at 1.43;
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2012 – sale of US$ 34 million at 1.43;
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2013 – sale of US$ 6 million at 1.43
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