New Century Resources has agreed to sell around 25pc of its annual zinc output at $1.32/lb for three years under a hedging deal with Macquarie Bank.
Patrick Walta, managing director of New Century said on Jun 15 that the deal will lock in the high prices for the metal as zinc prices have risen by at least 70pc from 2020. The deal with Macquarie along with treatment charges, which have reduced by 47pc from last year, will also help the company to strengthen its EBITDA.
Under this agreement, the Australian miner has hedged over 90,000mt of zinc obtained from zinc concentrate to be payable at the agreed amount between July 2021 and June 2024. The volume will be sold in equal monthly proportions, which totals approximately 108,000mt of its zinc production per year.
Like its other physical contracts, this transaction will be settled by Century and Macquarie every month against the average LME official cash price for Special High Grade (SHG) zinc.