Good news, however despite the high grades the narrow width and depth may not facilitate low cost extraction. I also liked the MDs letter, one of my key concerns with KZL is a lack of a strategy and direction. For example, we don?t know where the company will be in 2 years time when the deposits that are currently being mined are likely to be depleted. Information out in recent days indicates that King Vol will replace Munguna and the new Griffiths Hill may replace the Balcooma copper ore. I think they will need to bring additional mines online to produce enough feed for the Munguna Plant. Victoria or the poly metallic resource at Balcooma may be options. I also got the impression form the MD?s letter that he is considering divesting in Lounge Lizard. It would be quite valuable to WSA so it could be an option as the cash flow is somewhat limited by the 50,000tpa mining rate. WSA are currently mining more than they can process so i doubt they will provide any additional plant capacity to KZL in the near future. Any thoughts? The cash could be used for development of the north qld assets and to remain their equity stake in MUX when it moves into production.
KZL Price at posting:
59.5¢ Sentiment: LT Buy Disclosure: Held
