good quarterly report , page-10

gself

Some fair comments made.

Firstly, I do like their acquisition of Ni tenements in Forrestenia, and this is what attracts me to hold KZL shares. Admiral Bay in my very inexperienced view is a much longer term prospect and could turn out well. China itself is a major zinc producer and I think until fairly recently it was a zinc exporter, so I do not see zinc as being such a great investment in the near to mid term. In the unfolding economic conditions since August 2007 the new circumstances should have been recognised earlier by curtailing ongoing exploration at AB.

Secondly, for me the first rule of business is to have liquid financial resources to ensure that you can survive a downturn. This is something that small marginal miners such as MCR, IGO and PAN have done. KZL has receivables, but all miners have that as well. No doubt KZL also has incurred short term debts that it has not paid for, and has a range of legal commitments that would involve significant expenditure.

As I said the extreme fall in KZL's share price reflects the significant risk of its failure. Yes I do consider that it is management's responsibility to anticipate an economic downturn and plan for such an event. These are experienced operators in the mining sector of some 30 years, and they would have been through several large and small commodity cycles. The problems in the financial sector have been around for over 12 months, so again there is no execuse for management to have not recognised the potential negative impact and prepared for this.

I do not mean to be harsh, just realistic. I also note that Robinson and Treacy gave themselves a substantial monetary rise in the 2007-8 year, which appears excessive. In fact I think they are both over-paid,

loki