Photo by: Bloomberg
PERTH (miningweekly.com) – Copper-gold miner Oz Minerals has hedged a portion of the gold contained within stockpiles at its Prominent Hill mine, in South Australia, to take advantage of Australian gold prices, which were at a near 15-year high.
The miner told shareholders on Wednesday that the Prominent Hill stockpiles was estimated to contain some 370 000 oz of gold, and represented significant value for the company, as it had already been mined and contained known grades.
Oz has hedged some 60% of the recoverable gold from the stockpile, amounting to 171 200 oz, to generate revenue of A$293-million between 2018 and 2021.
“The gold contained in the stockpiles at Prominent Hill is a tremendously valuable, de-risked asset and we have decided to lock-in approximately 60% of the value by taking advantage of the current historically high gold prices,” said CEO and MD Andrew Cole.
The hedge contracts were entered into with a banking syndicate, which included NAB, HSBC and Westpac.
Cole said on Wednesday that the gold stockpiles at Prominent Hill would continue to grow over the remaining life of the openpit mine, adding that the company’s hedge position would be reviewed on a quarterly basis, and the ability to maintain a hedge position equivalent to around 60% of the recoverable gold contained in the stockpile would be retained.
The current stockpile was expected to be drawn down through to 2022.