Well, we know they are not going bankrupt any time soon and have enough cash to fund operations for at least 18 months even if commodity prices fell back again and now they will benefit from a weaker AUD. I think they oversold about 18% based on lower production of 20%.
Improvement continues in the zinc market. Treatment charges across the board are either being waved or or forgotten about all together. Another very bullish sign that the deficit problem is starting to be seen.
To quote Resource Investing News:
"Falling processing fees occur when shortages of zinc concentrate begin to appear and refiners are forced to compete on prices for miners’ business."
Further out. The first big zinc mine to come offline in early 2013 is XStrata's Brunsick mine in Canada. 250,000t of zinc concentrate comes offline in Q1, 2013 - maybe earlier as they mine was due to deplete reserves in 2010.
Those that don't buy KZL at these prices, will be kicking themselves in 12 months time. I imagine they will have no problem raising capital from sophisticated foreign investors given the outlook for zinc in the medium term.
KZL Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
