Agree Nut. Last quarter was 2.369Mt Ore and they are still sticking to 12Mt guidance. Will require heroic next 3Q's of production but still possible (share your scepticism though)… Hydraulic mining is the simplest mining process ever (basically a big hose) so that should mean they are able to ramp up (provided not plant constrained) Lower volumes need to be made up for with higher prices.... hence... need prices to remain or increase on current levels. Equity value moves significantly with small A$ price bumps. Yes there is potential downside from here but at these levels I'll place my chips on there being more upside than down... The reason you would take up your entitlement is if the Zn price moves north (or stabilises) between now and allocation close date than 15.5 could be good value. If Zn price goes down then yes - time to pause and consider... Effectively we have a free option at 15.5 and can wait and see what Zn price does over the intervening period I'd still prefer to be single commodity exposed with operating and price leverage than to throw the Goro headache/turnaround in as well. Mgmt has no where to hide now - you'll notice they've even started talking life-ex in the last presentation so they are acutely focussed on the current operations... doubt that would have occurred if Goro was acquired. Would have bitten off too much I think....
NCZ Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
