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Hedge Policy and Position
Condestable
Existing and proposed hedging as of February 11, 2011 is set out in the tables below. The hedging has been executed using a zero cost collar hedging strategy whereby positions have been entered into to achieve a minimum hedge price (floor) and a maximum hedge price (ceiling). There is no cost to the Company for this collar hedging strategy. The counter party to all contracts is Condestable's senior secured lender (Societe Generale) and is without any margin call requirements.
Forward Contracts:
| Metal |
Period |
Unit |
|
Pricing |
|
| |
|
FMT |
Pounds |
$/tonne |
$/lb |
| Copper |
2011 |
20,625 |
45,457 |
3,494 |
1.59 |
| Copper |
January 2012 |
1,750 |
3,857 |
3,408 |
1.55 |
| Ounces |
| Gold |
2011 |
2,400 |
|
&741.50 |
|
Copper Collar Hedge Ranges:
| Period |
Unit |
|
Pricing Floor |
|
Pricing Ceiling |
|
| |
FMT |
Pounds (000s) |
$/tonne |
$/lb |
$/tonne |
$/pound |
February 2012 -
March 2013 |
7,000 |
15,428 |
6,500 |
2.95 |
8,760 |
3.97 |
| |
1,050 |
2,314 |
7,500 |
3.40 |
10,450 |
4.97 |
| |
1,960 |
4,320 |
8,000 |
3.63 |
10,970 |
4.98 |
| |
3,990 |
8,794 |
8,000 |
3.63 |
10,950 |
4.97 |
Aguas Tenidas
As of June 30, 2010, the hedging program for Aguas Tenidas Mine is as follows:
|
Metal
|
Period
|
Contract Type
|
Volume
|
Unit
|
Strike per unit (US$)
|
$/lb
|
|
Copper
|
2011
|
Forward
|
19,602
|
Fine metric t
|
4,865
|
2.21
|
|
Copper
|
Jan-12
|
Forward
|
17,496
|
Fine metric t
|
7,390
|
3.35
|
|
Copper
|
Jan-Mar 2013
|
Forward
|
1,800
|
Fine metric t
|
7,319
|
3.32
|
|
Zinc
|
2011
|
Forward
|
16,848
|
Fine metric t
|
1,601
|
0.73
|
|
Zinc
|
2012
|
Forward
|
13,446
|
Fine metric t
|
2,042
|
0.93
|
|
Zinc
|
Jan-Mar 2013
|
Forward
|
1,125
|
Fine metric t
|
2,272
|
1.03
|
There are no margin calls or other collateral delivery obligations under the required hedging program.
Also in connection with the terms of the Senior Facility, MATSA has restructured its Euro/USD foreign exchange forward contracts, summarized as follows:
-
2011 – sale of US$ 34 million at 1.43;
-
2012 – sale of US$ 34 million at 1.43;
-
2013 – sale of US$ 6 million at 1.43
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