Hedge Execution Capability

A new small high cost mining company with limited staff and financial resources needs to implement a multi-year hedge program against future production to ensure survival during a market downturn. Management decides they need to bring in help, experienced in setting up hedge programs, to put them on the right track and ask us to:

• guide them to structure and implement a hedge program
• help them put governance, control, broking support and systems in place
• assist with implementation by providing support and education for their people

After meetings with management a hedging policy is drafted. Drawing on our contact base brokers are identified and the paperwork required to bring credit lines onboard is completed. Through work with staff, hedge timing is determined and staff are educated about markets and execution. Concurrently, controls are structured and back office assistance is given with systems and the required interactions with their new brokers. Longer term we maintain a relationship to provide guidance about evolution of the program.