Regis hedges diesel bets
PERTH (miningweekly.com) – ASX-listed gold miner Regis Resources has taken advantage of the historically low oil prices by entering into a commodity swap transaction to partially hedge diesel at its Duketon gold project, in Western Australia.
The gold miner has hedged a total of four-million litres a month of diesel from May this year until April 2017, and a further two-million litres a month between May 2017 and October 2017.
The hedging would be implemented in two tranches, with the first tranche priced at A$0.404/l and the second at A$0.419/l.
“Between our three Duketon processing facilities and the contractor openpit earthmoving fleet, for which Regis buys the fuel, diesel is the largest individual cost line in our operating cost base,” said Regis executive chairperson Mark Clark.
“We believe this 12 to 18 month hedge, undertaken at close to the lowest ever base diesel cost recorded at Duketon to date, is a strong medium-term risk management and value creation opportunity for Regis,” Clark said.
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