Shares in struggling base metals miner Kagara have crashed almost 40 per cent after the company followed up a bad half-year result with news that company founder Kim Robinson would step down as chairman.
Kagara stock started the day at 31¢ but by midday its price had slipped to 19¢.
On Tuesday the company revealed a larger than expected underlying interim loss of $20 million and announced an operational restructure that will result in job cuts and lower production this financial year.
In Kagara’s interim accounts, which were lodged late, the company’s auditors raised material concerns about its ability to continue as a going concern.
These were key factors in Macquarie analyst Howard Carr downgrading his recommendation on Kagara to “underperform” and slashing his price target for the stock from 45¢ to 25¢.
He also doesn’t expect the zinc market to provide the company with much respite in the short term.
“We note Kagara is a high-cost zinc producer and we believe zinc prices are unlikely to experience a significant increase in the short term,” he said.
Mr Robinson’s resignation as chairman was announced this morning. He will remain on the board as a non-executive director.
Dr John (Shad) Linley has been appointed as interim chairman until a permanent replacement for Mr Robinson is found.
KZL Price at posting:
19.0¢ Sentiment: LT Buy Disclosure: Held
