I think they were pretty clear and transparent about the restructuring efforts.
The EBITDA loss of A$(15.3) million was as a result of the higher Australian Dollar, falling commodity prices and decreased by-product credit revenues.
They over-produced zinc from mines located a much greater distance from the Mt Garnet central region e.g. Thalanga and Mungana but have stated they plan to refocus operations around zinc and copper production from the Balcooma underground operation and Baal Gammon open pit operation in the Central Mt Garnet region, with ore processed through the Mt Garnet treatment facility.
That cuts out about 50% of ore trucking costs (a major expense) alone plus the copper production ratio was:
- In Q2 - copper was just 27% of total zinc/copper produced - In Q3 (this quarter) - I estimate it will rise to 43%. Up 60% from Q2.
Add to that 80 mill cash at bank, lower AUD, better commodity prices, lower Brent, 50% reduction in administration and operational costs and their restructuring plans looking pretty clear and achievable to me.
If I didn't think so, I would have sold. Sellers will look like naked swimmers after the tide has gone out if KZL don't announce they're bankrupt on Apr 11. Certainly that's what people expect.
2009 - KZL has 200 mill in debt and 2 mill in cash 2012 (now) - 62 mill in debt & 80 mill in cash...
You do the math...
KZL Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
