Mais uma notícia sobre a forma como o hedge da Avgold influenciou negativamente os resultados (esta notícia dá-nos o valor de venda do hedge contratado bem como a cotação média do Ouro no 3º Trimestre, entre outras curiosidades).
JOHANNESBURG – Mid-tier gold producer Avgold kicked off the September reporting season with a set of results revealing the pain its forward sales of gold had caused, despite a turnaround at its low cost Target mine.
The hedge, a mechanism which allows companies to guarantee a price for their gold, hurt Avgold in the September quarter, as the group delivered 90 percent of its production into its hedge position at a gold price $30 lower than the quarter’s average.
Avgold would have been a star performer without the hedge in place - spot gold averaged $359/oz during the quarter, but Avgold’s average price received was just $328/oz. The effect of the hedge is even more damaging if Avgold’s cost profile is taken into account. In the September quarter, Avgold cut cash costs at Target, its only operating asset, by 18 percent, to R41 018/kg, from R50 060/kg in the June quarter.
Avgold received a rand per kilogram gold price of R78 721, down from R83 390 in the June quarter, as the steadily appreciating rand ate into the industry’s margins.
With the hedge in place, the group showed a loss per share of 12 cents, from a loss of 14 cents in the June quarter. Without the hedge, Avgold’s earnings per share would have been 6 cents, from 1 cent previously.
Avgold was forced into the hedging contract by the syndicate of banks which provided the initial funding for the Target mine.The group has 72 percent of its forecast gold production up to 2006 hedged, with a negative mark to market value of $331 million.
Avgold finance director Mike Arnold said the group would have made about R10 million extra if the hedging contract had not been in place. He said the group may have some room to move on the hedging contract next year, and would deliver 30 percent of its production into the hedge from the December quarter.
Avgold managing director Jan Steenkamp said some costs had been cut at the Target mine, including contract labour, and the cuts would continue this quarter. He said labour would not be affected.
The group managed to boost revenue 11 percent to R244,2 million, from R219 million, as gold sold from the Target mine rose 51 percent to 3099 kg from 2048 kg in the three months to June. Steenkamp said the mining of higher grade areas at Target had yielded an average grade over the quarter of 11.38 grams per ton, from 8.4 grams per ton in the June quarter, helping to boost revenue. Steenkamp said this slide would back to an average of 9.4 grams per ton in the current quarter as the mine reverted to planned grades.
An analyst at a leading international securities firm said the September quarter had shown a huge overall improvement for Avgold, as a result of Target’s new mine plan. However, the analyst said that over the next three years, the revised plan may put constraints on the mines’ flexibility.
Avgold said it was confident that its production target of 350 000oz by next year’s full year results would be reached.
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