VANCOUVER (miningweekly.com) – European base metals business Nyrstar has entered into further short-term strategic hedging arrangements utilising put and call collar structures to mitigate potential downside risks to the zinc price.
The global multimetals business, with a market leading position in zinc and lead, said Thursday that for the first quarter 2017, protective hedges were already in place for 70% of the free metal produced by the metals processing business segment, or 8 000 t/m of zinc metal.
It has also hedged 3 000 t/m of the payable zinc metal produced in concentrate by the mining segment, resulting in full exposure for the hedged volume in the first quarter to a floating zinc price between $2 127/t and $2 496/t. In the current and first quarter, Nyrstar retains full exposure at a price above $2 800/t.
Belgium-incorporated Nyrstar, which has mining, smelting and other operations located in Europe, the Americas and Australia, advised that protective zinc price hedges have also been completed for the second quarter and fourth quarter of 2017, for 70% of the free metal produced by the metals processing segment (8 000 t/m of zinc metal), plus 5 350 t/m of the payable zinc metal produced in concentrate by the mining segment, resulting in full exposure to a floating zinc price between $2 172/t and $2 543/t.
In the second quarter of 2017 to the fourth, Nyrstar again retains full exposure at a price above $3 117/t.
Nyrstar's said it will continue to review and potentially apply strategic hedges to limit downside risks for key commodity price and foreign exchange sensitivities during the implementation of the company's transformation and turnaround plan.
Zinc spot prices have risen about 15% to $1.14/lb in the last 12 months, as an emerging supply gap and a run-down of stock supported the trend.