Vault Minerals Removes All Gold Hedges Ahead of FY27

Vault Minerals Clears All Gold Hedges and Becomes Fully Unhedged

Vault Minerals Limited (ASX: VAU) has completed the accelerated settlement of its last remaining gold hedge positions, removing all forward gold sales and leaving the company fully unhedged ahead of FY27. According to the ASX announcement dated 26 June 2026, the final tranche covered 10,233 ounces previously scheduled for delivery in Q1 FY27 at an average contracted price of $2,797 per ounce, with total settlement consideration of $31.2 million.

For investors, the update matters because it changes how Vault will capture revenue from future gold production. With no hedge book remaining, the company is now fully exposed to prevailing gold prices. The announcement also confirms that the transaction was funded from existing cash reserves of $728 million as at 31 March 2026, with no dilution to shareholders.

What the ASX Announcement Confirmed

In the announcement, Vault said the settlement of the remaining hedge book was part of a disciplined capital management approach aimed at improving exposure to higher gold prices. The company stated that all outstanding hedge positions have now been extinguished.

That final settlement follows an earlier move in November 2025, when Vault settled 47,319 ounces ahead of schedule. According to the company, that earlier action enabled full participation in gold prices through H2 FY26.

Taken together, the two settlements total 57,552 ounces of gold hedges removed before scheduled delivery. Vault said the broader strategy has generated $13.8 million in incremental revenue, net of settlement costs, while avoiding any equity raising.

"The termination of the Q1 FY27 gold hedges leaves Vault entirely unhedged, thereby maximising exposure to the prevailing gold prices."

Why Removing Gold Hedges Matters

A gold hedge is a contract that commits a producer to sell a set quantity of gold at an agreed price in the future. These arrangements are often used to provide revenue certainty, particularly when a company wants to protect cash flow, manage debt, or support capital spending plans.

The trade-off becomes clearer when market prices rise above the contracted hedge price. If spot gold prices are higher than the fixed contract price, the producer still has to deliver at the lower agreed level. That can significantly reduce the revenue that would otherwise be realised in a strong gold market.

For Vault, the final hedge ounces were contracted at an average of $2,797 per ounce. By settling those positions early, the company has removed that ceiling on future realised prices. In practical terms, each ounce produced can now be sold at the market price available at the time of sale, rather than at a lower legacy contract price.

However, this does not automatically mean higher revenue in every scenario, because future earnings will still depend on gold prices, production volumes, and operating performance. It does mean that Vault's future gold sales are now more directly linked to movements in the gold price.

Gold Hedging Explained for Investors

For investors less familiar with producer hedge books, the concept is straightforward once broken into its main components.

What Is a Hedge?

A hedge is a forward contract. It allows a gold miner to agree today on the future sale price for a portion of production. This can reduce uncertainty and protect against a falling gold price.

What Does Unhedged Mean?

An unhedged producer has no obligation to deliver future ounces at pre-agreed prices. It can sell production at the spot market price prevailing at the time.

Why Would a Company Remove Hedges Early?

A company may decide to settle hedges early if market conditions make the contracts less attractive than open market sales. This usually happens when spot prices are materially above the hedge price and the company has the financial capacity to absorb the settlement cost.

What Is a Settlement Cost?

This is the cash payment required to close a hedge contract before its scheduled delivery date. In Vault's case, the ASX announcement states the final settlement consideration was $31.2 million.

What Does Zero Dilution Mean?

Dilution occurs when a company issues new shares, reducing existing shareholders' percentage ownership. Vault confirmed the hedge settlement was funded from cash reserves, so no new shares were issued to complete the transaction.

The Financial Position Behind the Decision

One of the more important points in the announcement is not just that Vault removed the gold hedges, but that it did so from internal liquidity. The company reported $728 million in cash reserves as at 31 March 2026, which provided the balance sheet capacity to settle the final hedge position without external funding.

That matters because hedge removal can require substantial upfront cash. A company with a weaker cash position may have to leave hedges in place, refinance, or raise equity to fund an early exit. Furthermore, Vault's announcement indicates none of those measures were required.

The key financial metrics set out in the update are summarised below:

From an investor perspective, that combination of cash backing and no dilution is central to the announcement. It suggests that the company was able to alter its revenue profile without changing the share count or relying on fresh capital.

What This Means for FY27

With all hedge obligations now removed, Vault enters FY27 with no remaining forward gold delivery commitments. According to the announcement, the final hedge ounces had been due in Q1 FY27, so their removal affects the very start of the new financial year.

This has several implications investors are likely to monitor:

1. Direct gold price exposure — Revenue from future production should now move more closely with spot gold prices, because there are no fixed-price gold sales left in the hedge book.

2. Cleaner earnings profile — Reported realised gold prices may become easier to interpret, as investors will no longer need to factor in legacy hedge contracts when assessing revenue outcomes.

3. Capital allocation flexibility — With a reported $728 million cash position and no hedge book remaining, future updates may attract attention around how management chooses to allocate capital.

4. Sensitivity to gold price movements — Full exposure works both ways. If gold prices remain strong, realised pricing may improve relative to a hedged position. If prices weaken, there is no hedge protection in place.

That last point is worth remembering. Being fully unhedged generally increases leverage to the commodity price in both directions. The ASX announcement focuses on participation in prevailing gold prices, which in the current market has been favourable, but future outcomes will still depend on where prices trade.

Why the Announcement Matters to Investors

The significance of this update lies in execution as much as in the outcome. Vault has not simply allowed old contracts to expire in time. Instead, the company moved in two deliberate steps across roughly seven months to bring forward the removal of the entire hedge book.

That suggests management viewed the economics of early settlement as attractive enough to justify immediate action. According to the company, the result has been $13.8 million in incremental revenue net of settlement costs to date.

For shareholders, several features stand out:

• No equity dilution means existing investors retained full ownership exposure.
• A large cash balance allowed the company to act without financial restructuring.
• Full spot price exposure creates a simpler investment proposition for those following gold producers.
• Capital management discipline is reflected in a decision framed by the company as value-accretive.

"Vault's latest update shifts the company to a fully unhedged gold producer at the start of FY27, after settling the final 10,233 ounces of forward sales for $31.2 million from cash reserves."

What to Watch in Upcoming Vault Updates

The next few reporting periods may help investors judge the full effect of the hedge exit strategy. With no remaining hedge deliveries, realised pricing should provide a clearer read on how Vault is capturing the prevailing gold market.

Areas to monitor in future company reporting include:

• Realised gold price performance relative to spot prices
• Production volumes and whether output supports stronger revenue leverage
• Cash balance trends after the settlement outlay
• Capital management initiatives, including how the company uses its balance sheet strength
• FY27 operating commentary, particularly around margins and revenue mix

The ASX announcement itself is concise, but its implications are broader. It leaves Vault in a position where future gold price movements should flow more directly into revenue outcomes than they would have under the previous hedge structure.

A Simpler Gold Exposure Story

Vault's 26 June 2026 ASX announcement presents a clear capital management outcome: all gold hedges have been removed, the company is fully unhedged, and the process was completed without issuing new shares.

The final settlement covered 10,233 ounces at a contracted price of $2,797 per ounce, costing $31.2 million and funded from a reported $728 million cash balance.

According to the company, the two-stage hedge exit programme has generated $13.8 million in incremental revenue net of settlement costs. For investors, the result is a simpler exposure to the gold price through an ASX-listed producer, with FY27 set to begin free of forward-sale constraints.

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