nice write up in the afr, page-7

I don't know about doubling within 12 months. It would be nice but it ain't gonna happen. The company is already at a market cap approaching $200M and to justify that, a lot of exploration upside has already been factored in.

On a pure NPV basis, the concensus valuation seems to be around 95cps. (Macquarie Equities have it at 94c, Southern Cross at 95c). I've come up with my own NPV figure which is 90cps - I've used a higher discount rate.(10%). So I think you have about 20-25c in the share price which is exploration upside - substantial.

This year if they can crystylise some of that upside, put some reserves on the board, primariliy Montevideo, the Mungana and other deposits around Chillagoe, they can move that NPV figure past $1.

Someone on this board said that they were waiting for the price to come down to 80c before buying. This is a ridiculous comment with no connection to reality. For the share price to fall 20% below the NPV of the operation would mean that something serious must happen - either a complete collapse of the zinc, lead and copper price, a huge financial strain on the company say debt problems, or a serious operational problem jepordising the long term viability of the company. Fortunately, all these scenarios seem unlikely for the time being. Similarly unlikely however is a share price of $2.30 within one year.

What can really put Kagara on the way toward becoming a serious mining house is if they can define the true extent of those nothern deposits I mentioned above and justify the building of another plant up there. This could result in a profit after tax in 2-3 years, if that production comes on board of $50-60M. There is also quite a bit of gold up there and they have to pursue that opportunity as well. KZL would become a substantial producer if these plans come to fruition, justifying a market cap much higher than the present.

Patience though is the most important thing you have to have with this stock to realise the biggest profit. I've been with KZL for over 2 years now and have added to my position on pullbacks carefully looking at the buying of Kim Robinson. His last purchase was at $1.05. I think director on market buying/selling of stock is one of the most important pointers to the direction of which the share price is headed. (in particular buying).