The ironic thing is that selling silver hedged is the smart thing to do, so long as they don't get crazy about it, and sell only a little. If they sell silver for 3 months out, they get the current price, plus a time premium.If silver is flat, or only goes up a little, they come out ahead, and if silver goes down, they come out way ahead. They only lose if silver goes straight up. Even then, so long as they only sold 3 months worth, its not a big deal. If they keep #$%$ it, quarter after quarter, they would come out ahead in the long run.
I sell very little chance of silver making any big moves in the next twelve months. I see interest rates continuing to rise, and that's normally not good for precious metals (or for the stock market). I see silver staying in a trading range of 15-25 for the next 12 months. I'm still just watching, having had no position in PAAS since selling a year ago.
I disagree about hedging effects. It is possible to buy derivatives to play on volatility, i.e. win any time except static silver price case. However, it is not the case for plain hedge, i.e. direct buy of futures contract (the same as direct buy of put options). PAAS would lose on their hedge as long as silver price stayed higher than $20.43, and they could gain something if silver price dropped below that price.
If your prediction of stable trading range, 15-25 is correct then it would make little sense to invest consistently in silver producers. Moreover, $15 silver could just kill most miners. Frankly, I am bit more optimistic about silver market; though likely less optimistic than most posters here.
Anyway, it was great to see you on this board again. Hope you will contribute more here.