I have also voted with my feet. I agree, it is not all miners. One would think that the unhedged miners would attempt to put some pressure on their counterparts in the boardrooms of the hedged miners because hedging is killing them. Borrowing the product you produce so you can sell more of it than you produce is insanity. It must catch up to them at some point. I wouldn't touch a hedged miner in this environment.
If the majors' hedging programs are so wonderful; i.e., no risk because they can opt out if the price rises but get all the benefits if the price drops, why aren't all companies adopting the same hedging procedures. After all, there's no risk. Whoever is taking the other side of these hedging trades is, apparently, willing to forego their profits if the POG rises and let the hedgers off the hook, yet is paying up when the price declines. Does this really strike anyone as plausible? No risk hedging???? It just doesn't pass the smell test.
If Barrick has such a great hedge program (a no risk program, btw) than why doesn't there fiercest competitor, Newmont, have the same program? It sure as hell isn't because nobody in the industry is smart enough to figure it out. For a company with such a wonderful, no-risk hedging program, why is Barrick near its 52 week lows? |
