Caledonia Mining Corporation (CMCL)

[Klusserdekluss]

This post is completely wrong and is clearly written by someone who has no understanding of what they have done
They have bought out of the money put options at a cost of a few hundred thousand dollars to lock in a gold price of 1,250 over 5 months of production. They got full price participation at all gold prices above 1,250. There are no other costs to this structure than the initial purchase of the options. They have not engaged in a forward sale and there are no margin calls. The reason the share price has been adversely affected is probably due to political and economic developments in Zimbabwe, which have been extensively covered in the mainstream media . However, if there are sufficient stupid people out there who cannot understand a simple put option, this may also be a factor. The press release was clear, unambiguous and not misleading in any respect.
“Caledonia also advises that it has entered into gold price hedging contracts for the 5 months from February 2019 until June 2019 for 22,500 ounces of production through the purchase of put options with a strike price of $1,250 per ounce. The hedge will ensure that Caledonia receive a minimum price of $1,250 per ounce of gold for the duration of the contracts whilst maintaining full upside participation.”