Same info different format. While they look good now, I think they will have made a mistake. Note that they were willing to risk going unhedged in zinc. In reality they will never be sorry as any losses on these hedges will just be buried as having earned less than if they had remained unhedged.They will feel smart and secure, knowing that they were not gamblers but prudent men. But I will know that they were not mssmartestperson. <g>
Boliden extends hedge on copper, lead, gold and silver but unhedged on zinc
By: Lawrence Williams
Posted: '04-JAN-07 09:00' GMT © Mineweb 1997-2006
LONDON (Mineweb.com) --Swedish base and precious metals miner, Boliden, which is currently one of Europe’s biggest mining companies, has announced that it will continue selling forward the bulk (around 70%) of its copper output until 2010 in order to secure a significant part of the cost of expanding its flagship Aitik copper mine. This operation is one of Europe’s largest copper producers and capacity is being doubled so as to treat 36 million tonnes a year of ore annually , up from 18 million tonnes at present. The mine also produces gold and silver and hedges on these are also being extended. When the expansion is complete in 2014 the new copper metal production capacity is expected to average approximately 100,000 tonnes a year. Gold production will double from existing levels of approximately 2 tonnes as a result of increased capacity and the metal recovery offered by the new facility. Boliden will also start processing molybdenum.
The company’s output of copper is now hedged at an average price of US$ 6,394 per tonne for 2008 and $ 5,920 per tonne for 2009. Furthermore, the hedging programme for gold, silver and lead has also been extended up to 2010. Gold is hedged at $665 an ounce for 2008 and $702 for 2009 and silver at $13.15 for 2008 and $14.59 for 2009. About 70% of projected output is hedged.
"The hedging creates a better balance in our operations from a long-term perspective when we can secure significant parts of the investment in Aitik. At the same time, we have chosen to keep zinc production completely unhedged and be totally exposed to future price trends of zinc," says Jan Johansson, President and CEO of Boliden. |
