Pan American Silver to eliminate silver and gold hedge contracts

Pan American Silver (PAAS) decides to close out its outstanding silver and gold hedges, saying hedges it put in place as a short-term tactical response may have been misinterpreted by the market and its shareholders.

PAAS previously announced forward contracts for 5.3M oz. of silver and 24K oz. of gold at respective average prices of $20.43/oz. and $1,323/oz.; the amount of silver and gold under contract represented a respective ~20% and 18% of its forecast 12-month silver and gold production.

PAAS -1.6% premarket.

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Comments (3)
  • Justfacts404
    , contributor
    Comments (8) | Send Message
    As a somewhat large investor in PAAS, I think this is a good move even if it costs some money in the near term. IMO,I suspect PAAS will show a reasonable profit in the next quarter and this will have a positive impact on the stock price.
    10 Sep 2013, 10:50 AM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
    Good to remove hedges since costs to produce must be more than the hedge. Silver will go higher eventually if not then they need to normalize production to lower costs instead of hedging at uneconomic levels.
    10 Sep 2013, 12:47 PM Reply Like
  • haleiwahu
    , contributor
    Comments (4011) | Send Message
    I wonder if the recent decline of silver value over the last week will affect PAAS decisions to maybe speed things up a bit?
    10 Sep 2013, 06:11 PM Reply Like
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