Surely we are about due for some sort of update regarding Perkoa...

Surely we are about due for some sort of update regarding Perkoa this week given that May is due to be a very busy month according to the recent updates from management. We are due to see (1) Mining Mobilisation and decline commencement by May 2008, (2) Logistics contracts to be signed this month (3) finalisation of offtake arrangements this month (4) finalisation of the financing direction for Perkoa by this month and (5) final VTEM results to be received by the end of May. Not to mention that the NS hearing relistment date of 23rd May is sneaking up fairly quickly as well. Suspect that we will either see a substantially higher (or lower) shareprice over the course of the next 2 weeks depending on what actually occurs.

One note on the zinc price. Much of the movement from my understanding can be attributed to (1) the earthquake in China which has seriously hampered the zinc smelter capabilities in that part of the world (some of the reports I have seen this morning suggest that a few of these smelters have been permanently put out of action) and (2) shorts subsequently being squeezed. The outlook for zinc still is pretty soggy however from a fundamental point of view there are a few aspects that are worth bearing in mind being (1) US appears destined for a shallow recession instead of the doom and gloom that was being spruiked around a month ago. This may result in a pickup in construction in the medium term which is a prospect which would have been largely not factored into zinc consumption forecasts and (2) no clear indication of any material change to the rate of economic growth and development in China after Beijing. Overalll, outlook for zinc is still quite worrying however I feel that the analysts calling a price of USD 1600 by end of 2008 may be just a tad pessimistic especially once we get a better picture of the supply implications of the earthquake in China.