Pan American Silver Says Hedging Moves May Have "Sent Wrong Message"

After entering into forward hedging contracts for 5.3 million ounces of silver and 24,000 ounces of gold, at average prices of $20.43 an ounce for silver and $1,323 per ounce of gold spread over a 12-month time period, Pan American Silver (NASDAQ: PAAS  ) announced today it is closing out its hedging positions.

There were several reasons for initiating the hedging strategy, according to Pan American Silver President and CEO Geoff Burns, including to guard against short-term market volatility. However, in today's press release, Burns admitted there were negative, unforeseen consequences.

"Our action may have inadvertently sent the wrong message to the market and to our shareholders about our hedging philosophy and our view of the long term prospects for silver and gold," Burns is quoted as saying.

Burns added, "we need to unequivocally reassure our shareholders that the Company's fundamental philosophy is still that of not hedging our precious metal production, thereby providing maximum exposure to the price of silver."

The hedging positions represented approximately 20% of Pan American's forecasted silver production over the next 12 months, and 18% of its expected gold production in the next year, the company said.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2630801, ~/Articles/ArticleHandler.aspx, 9/25/2016 3:33:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
PAAS $17.79 Down -0.47 -2.57%
Pan American Silve… CAPS Rating: **