Well you are mostly correct except for KZL started the quarter with 10.3-10.8 mill cash at bank.
I agree that 50% of the proceeds from LL (70 mill) could be used to pay off the refinance facility, which would leave them with circa 40 million and would reduce finance costs by -1.2 mill per quarter.
Cash savings initiatives were already announced at the start of Q1 (reducing costs by about 5 mill per month) but I agree it will cost them a further 10 mill to achieve those savings as redundancies etc cost money like you say. This would leave them with approx. 30 mill cash at bank, whilst they generate a positive 8-9 mill per quarter.
This is very doable with copper C1 costs at $1.82. They could literally afford to stockpile zinc and not invoice a cent of zine until prices move higher, should they choose to.
The rest will all depend on zinc, copper c1 costs and FX exchange rates during this half Q3 & Q4 but at current FX and commodity prices they would generate about 8-9 mill per quarter with 30 mill cash at bank. They also have 25.5 mill of cash tied up in MUX that comes out of escrow at the end of June 30, that they could access should they need to.
That doesn't rule out a cap raising at some point to reemploy the exploration plan but what it does mean, is that they are not going broke tomorrow. That's why the auditors classified them as a going concern. To confirm that they will have enough funds from asset sales and finance facilities to continue operations for the next 12 months.
KZL Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
