"We sell our Zinc at a Loss so cheaper to buy it off us than to own us." Average cost for quarter was 67c/lb, 55c for year. Average LME zinc price for year was 96c, currently at 75c (arguably has bottomed out). We're not running at a loss yet based on these figures. Century being a low cost mine will enable it to remain profitable even with suppressed zinc prices. The price cannot come down further without causing shutdowns of higher cost mines, so think the zinc side of things has little downside risk from here (so would rather not see a takeover at bottom of cycle).
I wonder what ZFX would be trading at today without the merger.. Interesting to note that Hindustan Zinc ($23bn market cap, low cost miner), only retreated 30% in last few months. Not sure how they escaped the carnage, their profit only went down 20% or so in 2008 quarter compared to last year - can only assume they're not a pure zinc play (despite being India's leading zinc producer).
OZL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
