I crunched some numbers to see the effect of this circa 70 million plus cash at bank 10 mill, that they had at the end of Q2. I think it looks quite positive.
By my calcs, offloading LL plus current commodity prices will enable them to grow cash at bank by about +20 mill qoq. Provided they spend -7 mill on D&E now without LL during Q3 & Q4.
Debt stood at -92 million at the end of Q2, so I expect that at least 30-40% of this will be paid off with 50 or mill so cash at bank to start Q4.
Next year they need about 55 mill for D&E or -14 mill qoq during FY13 & FY14 and should bank about +6 mill qoq if commodity prices are maintained at or close to current levels over this time.
So it's enough to see them through but won't be enough to fund Admiral Bay. This may be funded from much higher zinc prices though in 2013/14.
I also estimate full year EBIDTA at:
Q1 +23.8 (millions) Q2 -19.7 Q3 +19.8 Q4 +20.1
EBIDTA 44,0 (-56 for T&A) = -12 million loss for FY12.
Their original guidance was 54-72, so this should be revised down to 34-52.
KZL Price at posting:
31.0¢ Sentiment: Buy Disclosure: Held
