# Caledonia Mining cap and collar hedging contract over a portion of 2022 gold production

- Link: https://www.directorstalkinterviews.com/caledonia-mining-cap-and-collar-hedging-contract-over-a-portion-of-2022-gold-production/4121054531
- Published: 2022-02-24T07:24:45+00:00
- Author: Giles

**Caledonia Mining Corporation Plc** ([LON:CMCL](https://www.directorstalkinterviews.com/company/caledonia-mining-corporation/cmcl.l))
has entered into a zero cost contract to hedge approximately 25% of 2022 target 
gold production at Blanket via a cap and collar hedging contract for 20,000 ounces
of gold over a period of 5 months from March to July 2022.

The hedging contract has a cap of $1,940 and a collar of $1,825, meaning that, for
the 4,000 ounces of gold per month for the period, Caledonia will receive an effective
gold price per ounce of not less than $1,825 or greater than $1,940 and will receive
an effective spot gold price between these two levels.

> **Commenting on the announcement, Caledonia Mining’s Chief Executive Officer Steve
> Curtis said:**
> “Hedging gold production is not an easy decision for a gold miner as investors
> usually wish to maximise exposure to gold price upside. However, given the fact
> that our capital expenditure phasing is heavily weighted towards the first half
> of 2022 as we ramp up gold production, the board considered it prudent to take
> advantage of the current strong gold price to protect the balance sheet during
> this phase of higher capital investment with a five-month hedging arrangement 
> over a portion of our production.”

Share on: