Personally I think that the hedging is an excellent idea.
Whilst POG may appreciate in the ST you only need to look at historical charts to see how far it COULD potentially fall.
Like all commodities as the price goes up an increase in supply comes onto the market as high cost mines are brought to life, existing mines start double shifts, exploration projects intensify.
Given the life of the project and the reliable tonnage that should be processed once operational I think it provides some excellent certainty to lock in prices as historical highs.
4 years (term of proposed hedge) is long time to expect POG to remain at these historical highs - although ST I think it is well supported with USD decline).
Still leaves shareholders exposed to 50% upside.
Debt funding is obviously available to EVG and was an excellent decision, IMO, to take this funding option up instead of diluting EVG's exposure to the Las Lagonus project.
Another benefit of having the MD financially committed are consistent shareholder wealth creating/ protecting decisions.
Cheers John
EVG Price at posting:
9.2¢ Sentiment: Buy Disclosure: Held
