ACG Metals Ltd (LSE:ACG, OTC:ACGAF) has signed a hedging agreement to reduce cash flow risk during the construction phase of its Gediktepe sulphide expansion.
The structure covers around 14,000 ounces of gold, representing 50% of projected production until January 2026.
The hedge uses a zero-cost collar option. It provides downside protection 15% above the company’s budgeted gold price, while retaining upside exposure beyond $3,065 per ounce.
The agreement was implemented at a gold spot price of $3,020 per ounce.
"Implementing this structured hedging strategy is a pivotal step in strengthening ACG Metals' financial stability,” chief financial officer Patrick Henze said in a statement.
“As a copper-focused company, the current oxide gold & silver production serves as a strategic bridge to our long-term objectives.
“Locking in downside protection at prices 15% higher than our budget price allows us to significantly de-risk cash flows for the remainder of the construction period of our sulphide expansion project at Gediktepe.
“This approach not only supports prudent financial management but also delivers clear benefits to both equity and bond holders by enhancing cash flow visibility, reducing risk, and preserving upside. It ensures we can continue executing our strategy while delivering sustained value creation to all stakeholders."
The collar was arranged with Alpha Group, selected through a competitive process. The structure locks in a minimum sale price of $2,875 per ounce and allows ACG to benefit fully from prices above $3,065 per ounce.