IKN

Take physic, pomp

Capstone Mining (CS.to): Nice looking hedge book

After melding, fusing and gobbling up Sherwood Copper late last year, the newly grown Capstone Mining (CS.to) published a very interesting PR last night. Here’s the link so go look for yourself, and you need to look because there’s plenty of info about how the company has lightened its debt burden and moved the financial shells around.

This quick post is more of a headsup about the details of the hedge book, pasted below. Lots of lines and numbers and things as per normal with these tables, but the thing to take away is that CS.to is going to sell around 40% of its 2009 copper production at around U$2.61/lb. It’s also got about 30% hedged at U$2.38/lb for 2010.

The whole hedge book is worth U$115m if marked to market at current prices, with the book heavily weighted to the next three years. Of if you like, you can consider that if copper averages $1.50/lb in 2009, CS.to will sell its produce at a total average of U$1.94/lb thanks to this hedge. And as the company expects cash cost to come in at around $1.45 to $1.50/lb (and I guess that’s dropping too thanks to industry price cuts) CS.to has found itself in a very good place to ride out the worst of this storm.

I’m telling you now that there’s a lot more to understand about this company than my quick post shows you. The financials aren’t straightforward and would take plenty more to explain even semi-properly. But with that said, Otto says there are plenty worse ways to put copper exposure into your portfolio, if that’s what takes your fancy. I don’t own at the moment but did reco the stock recently at various prices under $0.90 (so bite me Casey and your “nice company but not going anywhere” call at the same time last month). DYODD dude, don’t waste your money at Doug’s house of mediocrity.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
----------------------------------------------------------------
Weighted Averages
----------------------------------------------------------------
                                            Price       Price
Year           Tonnes             lbs         (US$/t)    (US$/lb)
----------------------------------------------------------------

2009 Q1         5,564      12,266,520       5,961.32        2.70
2009 Q2         5,084      11,208,301       5,808.86        2.63
2009 Q3         4,600      10,141,264       5,680.60        2.58
2009 Q4         4,281       9,437,989       5,546.56        2.52
----------------------------------------------------------------
Total 2009     19,529      43,054,075       5,764.59        2.61

2010 Q1         4,131       9,107,296       5,380.45        2.44
2010 Q2         4,131       9,107,296       5,264.99        2.39
2010 Q3         3,765       8,300,404       5,190.35        2.35
2010 Q4         3,582       7,896,958       5,103.77        2.32
----------------------------------------------------------------
Total 2010     15,609      34,411,955       5,240.54        2.38

2011 Q1         3,282       7,235,571       4,860.60        2.20
2011 Q2         2,402       5,295,504       5,135.88        2.33
2011 Q3         2,774       6,115,623       5,596.87        2.54
2011 Q4         1,654       3,646,446       5,985.29        2.71
----------------------------------------------------------------
Total 2011     10,112      22,293,144       5,311.93        2.41

2012 Q1           300         661,387       7,097.50        3.22
2012 Q2           300         661,387       7,097.50        3.22
2012 Q3           300         661,387       7,097.50        3.22
2012 Q4           300         661,387       7,097.50        3.22
----------------------------------------------------------------
Total 2012      1,200       2,645,547       7,097.50        3.22

2013 Q1           225         496,040       6,875.00        3.12
2013 Q2           225         496,040       6,875.00        3.12
2013 Q3           225         496,040       6,875.00        3.12
2013 Q4           225         496,040       6,875.00        3.12
----------------------------------------------------------------
Total 2013        900       1,984,160       6,875.00        3.12

----------------------------------------------------------------
TOTAL          47,350     104,388,881       5,550.05        2.52
----------------------------------------------------------------

Leave a Reply

Your email address will not be published.

Hello, you are not in a chatroom, you are in my living room. Opposing views and criticisms welcome, insults or urinating on furniture unwelcome. Please refrain from swearing if possible, it is not needed.