JML - Jabiru Metals

Discussion in 'Stocks & Derivatives' started by lakesentrance, Feb 26, 2011.

  1. lakesentrance

    lakesentrance Member

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    Does anyone know much about these guys. They're just completing their Envirnmental Effects Statement for their new Stockman CU-ZN-Ag-Au mine in eastern Victoria.

    It's a re-opening of a closed mine (ex Wilga Mine).

    They have this to say in their 2011 financials re hedging of their silver finds ...

    Net losses on silver hedge financing $5,441,000

    What does that actually mean. Is it that they hedged their future sales on a lower price, and thus lost according to current spot price?

    Just found their hedging - Dec 2010 - average for next 30 months - 716,000 ozs at $21.62. That seems a bit cheap?

    Trading at .83
     
  2. PerthStack

    PerthStack New Member

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    It means the financiers get to sell the silver on the open market and keep the difference, plus the interest that would be accruing from the initial finance. Then all the bankers can get filthy rich of the backs of people who risk their lives actually getting the commodity out of the ground.
     
  3. lakesentrance

    lakesentrance Member

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    Yes, I just found here:

    Silver hedge financing
    During the half-year, the Company generated cash of $19,200,000 from prepaid silver hedge financing (net of
    transaction costs). The structure of the financing provides the Company with an up-front cash payment in return for
    forward sales of 861,403 ounces of silver over the period to June 2013. A total of 716,368 ounces of silver was
    outstanding at 31 December 2010.

    Selling it forward for $21.62 /oz perhaps isn't that bad from a manufacturers point of view. Afterall, a mine doesn't get spot for their extracted silver, I wouldn't imagine. It's still to be refined? Shaped into nice little 10, 20 and 1kg bars.
     

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