Ann: Strategy Revised to Target Larger Scale Production, page-13

While there may be some element of truth to the reason for the revised stragegy - I am not sure that having to jump through hoops for offtake partners (read smelters) or financiers is really the right approach.

Right now they have a small but very high grade Zn orebody and the time for mining is right now (actually the decision should have been made last year when it was clear that the structural shortage in the Zn concentrate market was real). Its not time to be phaffing about with feasibility studies into huge tonnages and a new expensive mill because of the increased timeframes, additional permitting timeline and a chance of missing the very high but unpredictable Zn concentrate price spike.

I would be fixing the mine, getting stopes ready for production and getting the current mill to the position where it is capable of taking ore, and telling any offtake partners that the the limited but high grade Zn concentrate is coming and they can either pay a fair price, now or pay spot prices once they are in production. I don''t think people realize how the lack of investment in the mining supply has totally altered the balance of power between Zinc miners/concentrate producers and the end users (Zinc smelters) - smelters are fighting to get their hands on any decent Zn concentrates at the moment and as long as Glencore keeps their shuttered producers in care and maintenece. It will only take one Glencore analyst to get out of the other side of the bed one morning and the whole zinc supply/demand equation could change, and there is no predicting whether this will happen tomorrow or in 10 years time.

Similar to story to the financiers - no point going to them cap in hand without a production and revenue stream - they will either laugh at you or offer such a bad deal that the company will be working for the banks, last time I checked the company has to look after its shareholders first. Better to be in limited but small production and cash positive and then go to get finance if you need it later for expansion - much more likely to get a better deal for the company and shareholders in that situation.

This orebody is a top of the market spot producer and the company must be quick witted enough and organized enough to make hay while the sun is shining, because we know from history that Zinc high price cycle time in the sun can be 5 sec followed by 10 years of darkness.....

All they need to do is copy exactly what RVR have done at Thalanga, and CZL can do it with an even higher grade orebody in a lower cost juristiction (mexico vs QLD). I don't know what they are waiting for but looks like a lost opportunity to go into production to me.

I have taken some money off the table, and will be putting it somewhere where there are people who want to put the funds to work in a timely manner, and will bottom drawer the rest. Will re-enter if it looks like CZL are ready to pull their finger out and start mining.