Aeris Resources Ltd (ASX:AIS) has taken advantage of high copper prices by entering into unsecured A$ copper hedges with Macquarie Bank Limited.
The hedges will cover the period August 2021 to June 2022 in scheduled monthly deliveries of 550 tonnes (6,050 tonnes in total).
Aeris produces copper at its Tritton Copper Operations near the towns of Nyngan and Cobar in central New South Wales.
The company produced 5,270 tonnes of copper at an all-in sustaining cost (AISC) of A$4.12 per pound (A$9,083 per tonne) in the March 2021 quarter.
Aeris has locked in the present high copper price through zero net premium option collars where the company buys puts and sells call options to form a collar structure with zero premium payable:
- The strike price of the put options is A$11,900/t; and
- The strike price of the call options is A$12,900/t.
Strong copper prices
Copper prices have rallied from their 3-year lows in the midst of the COVID-19 induced recession in 2020, with current prices reflecting a strong rebound as the global economy switches back on.
Last Friday, copper for delivery in September rose 2.45% from Thursday’s settlement price, touching US$4.369 per pound (US$9,611 per tonne) midday on the Comex market in New York.
The most-traded August copper contract on the Shanghai Futures Exchange finished daytime trading on Friday at US$10,622.20 a tonne and was on course for a weekly gain.