What is exactly the problem here, and why the surprise?
All this was disclosed in Quarterly Cashflow Report (ASX announcement 31st Jan), with similar cash burn projected for the next quarter .That will be covered for a while with $2M raised in December, but I reckon we'll see another placement in the coming quarter.
The issue here is with incompetent ASX, who's raising these questions 6 weeks after the quarterly report was published, where all the answers already in the report. That's why there was no big dump (aside for a panicked seller or two) yesterday after ASX query - the increased risk has been already counted in drop from above 1.2c at that time, to below 1c.
The main problem with CZL is why they don't start with the bloody mining yet? For that I don't have good explanation (and they haven't provided the proper answer in the announcements). One possibility would be that they don't really want to waste time on the actual production, but the main goal is to increase ownership in the project and burn cash on exploration to further increase the Zinc resource - ultimately flogging it all to some major miner. Which might turn out to be a good option for shareholders.
Anyway, everyone DYOR - I'm not in CZL for management's stellar record, but because Zinc resource is so good that possible reward is much higher, than the risk that they'll totally screw it up.
CZL Price at posting:
1.0¢ Sentiment: Buy Disclosure: Held
