Shanta Gold Share Discussion Threads

[chipperfrd] 02/8/2019 12:37

Over the same 17 quarters the difference between SHG's actual realised average quarterly price received and the average spot price over the same quarter has worked out at an average of just US$7/oz. So not too bad a cost for the risk mitigation obtained.

People need to remember that both spot and the realised prices are averaged over 3 months so comparing their current hedge price with spot after such a rapid run up in the gold price is hardly fair to management. The spot price was in a range of US$1266 to US$1438 over Q2 (average of US$1,309) and hardly predictable at any point - or for that matter into the future!

[chipperfrd] 02/8/2019 12:07

Over the last 17 quarters (from June 2015) they have managed their hedges so that the overall average of their realised quarterly price received to spot is 100%.

Given that they are insuring against gold dropping whilst they run down debt this must surely be seen as excellent risk management and in the best interest of shareholders.

[338] 02/8/2019 11:36

see you at 45p, AG ... :)

[redhill] 02/8/2019 11:27

ag

No it won't. There is no debt. They pay a commission to roll it over.

[jc2706] 02/8/2019 10:27

The thing about market impacts such as Trump's tweets is that their effect tends not to be lasting. Gold is still not yet firmly on a long term uptrend and could drop back. I don't think that it will but nobody can be certain. As such, I see no reason why the hedge should be closed currently if it can be rolled over for a couple more quarters.

[qs99] 02/8/2019 10:00

Hi Redhill, thanks, probably just showing my ignorance, I thought that given the sophistication of derivatives they could roll the old hedge, but not at the cost you state I would agree. My thoughts equate effectively I think to your option 2 above which given the POG has now stayed over $1,400 for 6-8 weeks no, that an extra $150 per ounce would be worth doing.

Agree re swings being wild, POTUS tweet yesterday reversing by c.$50 point in mind!!

Anyhoooo, heading towards 10p me thinks now....DYOR

[redhill] 02/8/2019 09:49

QS99


You can't roll the hedge into a higher one without first closing the existing one.That would cost several million $ 's which we don't have.
So we have two options.

1) Sell at spot and continue to roll the hedge over for a commission.

2) Sell at spot and partially sell at hedge thereby reducing the hedge over a period of time. ( That will produce a lower price for the gold overall but if it is done in stages it won't be a problem ).

We are all assuming the price of gold will continue to rise but of course it could drop right back.

Whatever happens the Company is in a far better position than when gold was at $1242 (Hedge Price ) so nothing to worry about.

[qs99] 02/8/2019 09:39

About to head higher?

[qs99] 02/8/2019 09:30

agreed, but they can and should alter it when things change

[jc2706] 02/8/2019 09:15

The hedge was a sensible step given the debt repayment schedule. It was insurance pure and simple.

[qs99] 02/8/2019 09:05

they can roll their hedge (at a cost) surely into a higher one? Why would you not do that?

[thebaron] 02/8/2019 09:03

Unable to buy 20k shares at 8.55am today

[juju44] 02/8/2019 08:39

It was not not mandatory

[338] 02/8/2019 08:36

hedging was part of loan requirement... this will end in 12 months or less

[juju44] 02/8/2019 08:32

It was a mistake . I said at the time

[redhill] 02/8/2019 08:30

bahiflyer

They are making hay now. They can sell their gold at spot and roll over the hedge or combine the two.

[338] 02/8/2019 08:05

Let's see if SHG can jump up today or Monday 😊

[bahiflyer] 02/8/2019 07:58

Shantas large forward sales at $1200 is the lasso around the share price
They need to bite the bullet and buy out of it and make hay now.

[jc2706] 02/8/2019 07:57

Not convinced about the lasting impact of words from somebody with a single digit IQ who wears a comedy hair piece! Welcome all the same.

[qs99] 01/8/2019 22:36

Haha yes probably go down tomorrow! But seriously trumps tweet/tariffs and pog reacting shows where it could head to... all helping Shg profits
Dyor

[338] 01/8/2019 19:54

Entering 10p+ zone will be nice since we have found good support at 8p

[hazl] 01/8/2019 19:44

It'll be up up up and away I reckon!

[redhill] 01/8/2019 19:28

I know,crazy! Shanta down tomorrow then.