Our valuation increases marginally to $9.75 a share. Reduced cash following the payment of a 70c dividend and mildly disappointing 1Q07 production is offset by higher short term zinc prices and the inclusion of a nominal $200m for Dugald River. Long term assumptions of US$0.70/lb zinc, US$0.41/lb lead, an A$/US$ exchange rate of 0.76 and a 10% discount rate remain.
ZFX is highly leveraged to zinc and lead. At spot prices of US$1.85/lb zinc and US$0.72/lb lead, our valuation rises to an incredible $30.00 a share.
Zinc is now at US$2.02/lb, what should ZFX is valued at now?
ZFX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
