Cash costs US25c per pound which is higher unfortunately than we expected. Their goal is closer to US20c despite the fact that they are currently working on margins of U23c per pound (ave. price realised was US48c). Other zinc producers can only dream about such margins. On the other hand KZL is much less leveraged to increases in the zinc price because of their lower costs.
Copper circuit cost reduced to $6.9M which is much better than the $10M original budget. From Aug05, 2,500 tonnes of copper concentrate per month! will be produced. This will bring in serious cash.
On the exploration front at Mungana: "The drilling program completed has shown that both the base metal and gold resources have significant potential to increase in size and grade." Apparently much more drilling is needed however. There is also an interesting possibility of molybdenum being a by-product at Mungana as they found a big crap of it when drilling. Molybdenum sells at US$32 per pound but i have no idea what it is or what its used for. Maybe someone else has an idea?
Anyway, looking at the bigger picture, the quarterly is excellent in my opinion, however the SP has risen quite substantially in expectation and the higher cash costs might give traders the signal to take profits. I expect a bit of price weakness tommorow. Hopefully not too much.
KZL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
