"This suspension is temporary while Kagara completes the restructure of its business and working capital."
I think some of you are reading it the wrong way.
Firstly what constitutes temporary - 2 weeks or 14 days?
As the ANZ refinance facility needs to be renewed on April 30, it is only until this time.
If you remember Baal Gammon was late to production by 10 weeks in Q2 last year, so a suspension of 2-3 weeks will have a minimum impact as they will still be 7 weeks in front on last quarter. They have plenty of stockpiled ore to focus on shifting, milling & invoicing, whilst they move mining teams to focus on production from Balcooma instead.
Given that they had already extended their ANZ facility at a time when they didn't have confirmation of Lounge Lizard being sold, I don't see it as a problem now for it to be renewed. This kind of business needs a 100 mill debt facility for 12 months.
The other part of the sentence is also very telling.
"while Kagara completes the restructure of its business and working capital"
Notice they did not say..."while Kagara is completing the restructuring of its business and working capital"...
i.e. the use of the infinitive form of the verb indicates fact rather than an ongoing process of whose outcome seems uncertain. It seems Kagara are pretty confident that they will complete this process. This statement seems more about reassuring suppliers as to their ability to pay bills etc.
And thus it comes down to what ANZ think about the future copper & zinc market in the next 12 months.
This is how ANZ see things...and note that should copper slightly weaken, that KZL margin is significantly higher than zinc. When zinc jumps 10-20c, KZL will make very good cash flow.
So to sum up for the fear monkeys...
1. KZL are confident of renewing their debt facility 2. ANZ are confident of KZLs main products and their future 3. Main roads are spending 38 million on upgrading roads to Einasleigh and Mount Garnet, of which there is really one main benefactor - KZL
Seems the only people who think KZL are in for the long-haul are the ones that matter. i.e. KZL, its major investors (still none selling) the Bank & the local council (providing road upgrades).
Traders/sellers can think what they like. They don't work at the bank nor at KZL nor at main roads and they are not privy to any of those conversations or views.
KZL Price at posting:
12.0¢ Sentiment: Hold Disclosure: Held
