If the stars align correctly in the next few months and KZL does indeed find a partner for the AB JV (likely given the zinc outlook) and gets the go ahead for MUX as well as a reasonable offer on LL, I think you'd be looking at $1.60 in the 6-12 months. $2 if zinc demand is maintained. Zinc price support will be key and a catalyst for the stock.
One interesting thing here is that every analyst is expecting zinc supply to peak in 2012. Not one has considered, for a moment, the impact of supply disruptions, strikes or weather related effects (i.e. Japan). I believe zinc supply peaked in August, 2011 as we have seen with some of the big mines failing to meet production quotas. Current forecasts are based on perfect supply, which simply doesn't happen in mining. In fact, more often than not, we get the opposite.
That said though, even if there is a zinc bull run, you can bet a lot of backyard and blackmarket zinc mines in China will open up, just like 5 years ago, so I'd halve whatever shortfalls experts are predicting but the timeframe seems to have moved forward.
KZL Price at posting:
41.5¢ Sentiment: Buy Disclosure: Held
