Ann: Positive PFS for Admiral Bay Lead-Zinc-Silve, page-12

re: Ann: Positive PFS for Admiral Bay Lead-Zi... A few comments:-

1. No Production until 2018 ? so don?t expect any reflection in the SP anytime soon.
2. Initial production of 100KT of pb and 85 KT of ZN per Annum. Not exactly Tier 1
3. PFS assumes 25MT @10%ZN eq over 10 years. This is above the average grade of the resource.
4. Assumes ZN and PB at $2,600 T or 1.20 lb . This is apparently conservative despite being 50% above current LME prices.
5. IRR of 12.5% is in the lower range for mining projects and may not justify the technically difficulties and associated risks.
6. Cost not reported, but do not appear to be to low (compare revenue to cash flow)
7. Capital cost of 1B to get to production ? This is well beyond KZL
8. The Kimberley?s has significant environmental and native title constraints. I hope they seriously considered the impacts of these on project time lines and cost.
9. Key upside potential from commodity prices, increases in grades from reserve definition drilling
10. Good opportunities for lower cost expansion.

A very ambitions project from KZL. The real litmus test will be wether they can get a JV partner onboard in the next 6 months. I would hope KZL wouldbe free carried to the end of DFS.

I think any short to medium term upside in KZL lies in their North Qld Assets (including MUX) and Lounge Lizard.