18 November 2008 Company Announcements Office Australian Stock Exchange Ltd 4 Floor, 20 Bridge Street SYDNEY NSW 2000 ABN 36 008 988 583 Second Floor, 24 Outram Street West Perth Western Australia 6005 PO Box 1320 West Perth, WA 6872 Tel: + 61 8 9481 1211 Fax: + 61 8 9481 1233 E-mail: [email protected] Web: www.kagara.com.au Mt Garnet Production Update In response to a deteriorating share price, which appears to be the result of hedge fund activity and margin lending fallout, your directors would like to reassure shareholders that our North Queensland operations are performing extremely well and that drawdown of our A$50 million facility with Westpac Banking Corporation has now occurred. Copper production is on target for approximately 11,000 tonnes of copper contained in concentrate for the December quarter, an increase of some 15 percent on the record September quarter result. If this is achieved then the cash cost for the 9,300 tonnes produced from the Thalanga and Mt Garnet copper plants will be less than US$1.30 per pound of payable copper. Production of zinc for the December quarter will increase by 75 percent to in excess of 7,700 tonnes at a reduced cash cost of less than US$0.40 per pound of payable zinc. As alluded to in the September quarterly report, this increased production is the result of increased grades being mined from the Mungana and Mt Garnet underground mines and excellent recoveries. These strong production forecasts, which are based on the assumption that the copper price and the exchange rate remain at present levels of US$3,700 per tonne and $0.65 respectively for the remainder of the quarter, are expected to continue into the 2009 calendar year, enabling us to achieve a forecast 40,000 tonnes of copper and 32,000 tonnes of zinc for the 2008/09 financial year. KIM ROBINSON Executive Chairman
KZL Price at posting:
41.5¢ Sentiment: Buy Disclosure: Held
