PERTH (miningweekly.com) – Base metals miner New Century Resources has executed a zinc hedging transaction with Macquarie Bank, representing some 25% of the annual production from its Century zinc mine, in Queensland.
The company has hedged 90 000 t of payble zinc over a three-year period, in equal monthly proportions, from July 2021 to June 2024, at a weighted average price of A$3 717/t, valuing the total transaction at A$335-million in future expected sales.
“The successful execution of this three-year hedging programme is an important achievement for the business, locking in the current buoyant zinc price and underpinning strong operational cashflow for the long term,” said New Century MD Patrick Walta.
“The zinc price has appreciated nearly 70% from its 2020 lows and New Century has now secured this price over a material portion of its production. The zinc price has never averaged above the company’s achieved hedge price for a three-year duration.”
Walta said that the hedging, combined with the 2021 zinc concentrate benchmark treatment charge being some 47% lower than in 2020, placed New Century in a strong position to deliver growing earnings before interest, taxes, depreciation and amortization, as well as operational cashflow for shareholders.