Value Microcaps Motherboard

[cl001]

Wade, EZM hedge.
Here is what I found from the EZM Annual report,
"At Neves-Corvo, management is preparing
for a possible down turn in the metals prices by concentrating on efficiency improvements in all aspects
of the operation. Further, to limit the Company’s exposure to the fluctuation in the copper price in 2006,
EuroZinc has put in place a forward sales position of 30,750 tonnes or about 36% of 2006 expected
production at an average price of $3,578 per tonne ($1.62 per pound). This will guarantee sufficient
revenue to more than cover all the Neves-Corvo operating costs. The Company also purchased put
options on an additional 2,000 tonnes of copper per month at a strike price of $3,000 per tonne ($1.36
per pound) with full participation if the copper price is above the strike price. The Company has
mitigated the Euro/US dollar exchange risk in 2006 by buying sufficient Euro hedges to cover the
expected Euro denominated operating costs."

It makes the EZM management look like a fools to hedge copper at such a low price and even bought puts on copper. TGB management seems doing the right thing. The only other company I own that is not hedged is NTO.
However, EZM management mentioned repeatedly in the cc that "only about 1/3 of 2006 copper was hedged". I think they used the low end of estimate production in the AR for legal reason and the management thought they could produce more copper(That's a good thing).