Investors are slowly waking up to the fact that the outlook for the $AUD looks increasingly bearish, which is great news for KZL. At one stage, people thought the Aussie would hit $1.20, which would have been terminal for KZL.
Longer-term the AUD is bearish and I estimate that at present production levels that every 1c cent fall in the AUD adds roughly 1 million in net operating profit.
The AUD will fall below the USD for one simple inarguable reason...
Australia stands to lose 4.5 billion in coal exports next year as US gas production continues to displace coal in power generation.
Thus the outlook the zinc & the AUD (KZLs two weak points) is very favourable and on this basis, the ANZ should extend their debt facility and KZL should also have no trouble raising funds, if and when they need to.
Tectonic plates are shifting and KZL is the buy of the century. We are starting to see that in very solid volume.
KZL Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
