There has been some discussion re AB on this thread. IMO, KZL,...

There has been some discussion re AB on this thread. IMO, KZL, (barring a "black swan" event) have a plan to get back to profitability, so selling AB for this reason is not required.

A Bay, though, is expensive to bring to production and IMO, KZL will never have the bal sheet strength to execute it themselves. JV's have been spoken about at the publication of just about every qtr, 1/2 year and yearly report, over the past 3 to 4 years but nothing ever seems to happen.

Is there a bit of "crying wolf" here?

So, where does A Bay sit in the KZL strategy? Is there a reason (different to the one stated above), to sell AB?

1. The market is ascribing zero value to AB. The KZL market cap is basically a sum of the cash and copper assets.

2. A resource of this size is like playing a long game. Significant cash, expertise, consultants and management time is consumed in bringing this sort of resource to production. (Look at IGO and Tropicana) If KZL was the junior in a JV - even 30%, the cash call on KZL could be more than they could sustain. Remember, for KZL to execute their current plan, they will need most of the cash from ops to reinvest into the business to grow it. It appears to be that there will not be enough spare cash for a JV for A Bay for at least 5 years.

3. Do they hold onto the asset, wait for Zinc prices to rise, and then sell it? Do they hold onto the asset, wait for the KZL sp to rise, and do a cap raising to fund A Bay? Or, do they offer it to the market now, and use the cash to accelerate the strategic plan (read "get back on track").

I am personally in the "sell it now" camp, but I am sure that other posters could provide good arguments for holding it. IMO, the greatest hurdle for AB is funding, and I cannot see a way for KZL to get that funding without destroying shareholder value in the process.

HT1