KZL has suffered margin compression and is too close to the edge...

KZL has suffered margin compression and is too close to the edge to be sustainable.

GSELF is correct.

Even if metal prices go up 10%, what happens if and when they come back down? You are potentially back to where we are now.

KZL does not currently have a sustainable business model. To get a sustainable model, they need to move down the C1 cost curve. To do that, they need more volume going through the current facilities. To do that they need capital to expand mines.

KZL probably need to raise $200m - use $95m of that to pay off debt, use the bal to come down the cost curve. Will they get $200m. It is doubtful. To do that they would need to sell all the assets. That could leave shareholders with about 12cps, but the company does not have a business.

Which ever way you look at it - it does not auger well.

HT1