Quarterly report coming out early is a good sign that things are going well. A contact advises that production in the quarter went well, treatment charges were down and are now less than US$200/t and shipping costs also down. In addition there will be a large adjustment for the finalisation of QP's/shipments in this quarter from the previous quarter. The zinc concentrate contracts give the buyer the option of pricing the zinc price between one month and three months after the bill of lading date. The buyer almost always goes for the 3 month option as it enables the smelter to match the zinc price paid for the zinc concentrate against the zinc price received by the smelter when it sells the metal. On my numbers this should result in an additional A$17m revenue to NCZ compared to what they would have received if the April to June prices had remained static. All up I have them generating around A$38m from the mine during the quarter. However, as always it depends on the shipments being in line with production which is not always the case. Should be a good day tomorrow. DYOR.
NCZ Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
