For the gold bull (and why else would you buy), these Aussies have no appeal at all. Most look like candidates for the trash heap. No wonder investors shun them. They are all high cost producers and have virtually nil call potential on POG. The good news is that the long puts could be sold for cash. If they did that, the whole equation would be dramatically altered.
Newcrest: Problem is the deeply in the money strike price of the long puts. Quantity sold is about six years production.
4,310,000 oz puts @ 347
575,000 oz puts @ 470
1,250,000 oz puts @ 423
Delta: Maybe a little light at the end of the tunnel? Well, not really. Have hedged (capped) about three years production.
856,000 oz forward sales @ 315
1,070,000 oz puts @ 326
Son of Gwalia: Forget it! Deep, in the money puts on six years production.
2,812,000 oz puts @ 362
Goldfields: Have hedged about two years production, but strike prices leave some room to participate in a rally.
355,000 oz puts @ 294, but about a years production locked out at low prices: 257,000 forwards @ 290, 183,000 calls (don't indicate long or short?) @ 253
I think we have gleaned over the dogs. Perhaps the focus should shift to the other business model: Unhedged producers with reasonable cost structures? |
