I bought some more today for 20c. Given that it was priced around 25.5c mid-December, it's not down that much. Production revised down -20%. Stock down a net down -20% from the lows, so seems a fair reaction given the backdrop of Greece, lower Aussie GDP, 5 down days and profit taking on markets overall.
Lower Aussie GDP results in particular may be a step on the path to lower interest rates and thus a lower AUD, which would be great for KZL if zinc prices rise in tandem over coming quarters. The AUD has already backed away from 1.08/1.09 back down to 1.055. Zinc prices are also stabilising around 91c.
Over the next 12 months, I would not be surprised to see them do a cap raising for 25-100 mill, if they feel the time is right to re-employ and accelerate the five year plan, so one should keep this in mind.
Next key date will be April 11, Q3/FY12 activity report, which will help us determine if and when a cap raising may be needed. The downside effect may be limited given the move down already and somewhat anticipated.
KZL Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held
