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updownflat, depends on cost, Do you know the cost, do you know if they could have hedged just on downside ???? All speculation, rejoice in the higher Iron Ore price and just think, Thank God Pavel didn't give it away, as he tried , otherwise we wouldn't even be having this conversation.
Straight out of Pavel’s playbook.
The moment things look like they are going to seriously move you do something to get the profits and it comes with a crass statement.
"I think I will increase the convertible options by another $25m".
"we don’t want to gamble"
A cyclical commodity business after 10 years of bust being part hedged against the boom??????
all of this should have done that should have done this . no one saw that rise in gold in 2012 and no one predicted the crash. heres' a test: who is prepared to make a prediction on the gold price ifor the 30th august this year; will it be higher or lower than today?
i say higher
Rusty,
answer this , why not only hedge for downside ?
Updownflat, if Iron Ore price had crashed, you would be the FIRST person to say, they SHOULD, have had hedging. Nothing ever goes in a straight line, and I for one, have no concerns about the company hedging some of the Ore to guarantee they would have enough money to pay their loans. This reduces Pogs guarantee, and if the rest makes even bigger profits even better. Very very similar to stop loss on shares.
Without Peter Hambro and Pavel there would be NO Petropavlovsk . Period.
Where would Up Down Flat be then? Probably trying to get his money back from woodford patient capital trust
Current Fe 62% jumped to $229, and Fe 65% jumped to $263, Even with 40% hedged at $175, IRC is still in massive mojo. Anyway, on average they will be able to achieve sale price between $180 to $220. Revenue between $500 to $600m. IRC has very good profit margins.
"make hay whilst the sun shines", feedstock is at high, but I am sure Peter wont want to gamble that it might go higher.
Updownflat, get off your high horse about hedging. In IRCS position it was a good choice. Because if Iron Ore had crashed, you would have been the FIRST person to complain. Now is not the time to be taking gambles, the same way POG had hedging when we were completing the pox hub. We lost money, BUT, we had the guarantee that we could complete the pox hub.
Do you EVER, have anything positive to say. Honestly, they are damned if they do and damned if they don't. Just be happy iron ore is high and company has the chance to make some money for once. Hopefully they can make hay whilst the sun shines, and build up reserves of cash to be able to release us from the guarantee.
IRC can still make $70m of cash in Q2 despite the bad management.
KRSS,
the issue is that he didn’t just cover 40% the downside risk, he eliminated 40% of the potential upside gain. The potential impact on cash and therefore the balance sheet is very real. Not nominal at all. At today’s price he theoretically eliminated $100m pa of potential revenue/Ebita/cash for what reason? To save $1m in potential downside only hedging costs. He is a genius !!!!!
IRC’s real issue is bargaining power, not hedging because it’s impact on balance sheet is nominal, hedging is just Peter Hambro likes to speculate or it had some justification when iron ore prices were low to cover the downside risk. IRC’s Bargaining will improve now because they can move from maximum production to optimal. Secondly, POG increases its stake in IRC, because that diminishes the downside risk.
Freddie I have it from Peter that he has no desire to go back to Russia because of the Russian Federation corruption, He's more interested in gold in Guyana
https://wbdgold.com/the-team/
Its great to see that IRC share price has almost doubled in the past 2 trading days ... but let's not forget that the sp is now back to almost exactly the price it was at in Feb 2015 when we had the Rights Issue here ... and iron ore prices are now 3x as high as then - sign of a quality outfit. I'd still happily support our BoD if they sold the IRC stake below market so long as they lost the guarantees at the same time.
Well ok then.....
Updownflay, benefit of hindsight is a wonderful thing, don't blame Hambro for hedging some production. If he had done that with the gold price, BEFORE, we got into the mess we got into, we would not have got into this mess.
As long as its hedged at a reasonable price thats fine. The thing they need to do is make hay whilst the sun shines.
Freddie,
A. He is a ******
B. He gets a kickback
C. He is short
I cannot rationalise using a collar in a bull market for any other reason.
Updown i dont think they will increase their holdings but you cant knock hambro he seems to be doing ok at the helm , we might see him back in june ha ha
KRSS, really do POG want to buy more IRC, especially since that genius Hambro hedged 40% of production against an upside ???
It will be gr8 to hear that POG increased its stake in IRC , even just 5-10% will do trick. Both IRC and POG will benefit.
There is certainly something going on there, and to think Lawrences best mate Pavel wanted to give it away for a quarter of the price, and Retired Banker agreed !!!!!
Agree Rusty, nice to see you continue to hold.
Agree jrc i think it closed 36% higher
That’s a big jump - do you think someone’s showing interest ?