zinc price drops further, page-3

Theres a good analysis of the zinc prices somewhere amongst the Commsec analysis of one of the current zinc miners guys.Cant remeber which.You'd have to have a dig around the net.It pretty much says what we have all been saying re zinc prices into the next decade and a pickup then.But ftm its looking weaken right back to around 72c/lb.

The only thing I can take heart from with commodities in general is the way in which copper stocks rolled over at 200Kt and resumed its deficit.Since then its been bubbling along well under 200Kt's supporting the Cu price whereas zinc shows no signs of slowing the stockpile build to date.

At some stage these lower prices MUST kick in and close those restarted moth balled mines which should see a big chunk of the current surplus removed.

Nearly $60M is a big chunk to take out of any projects financing D64.The thing that really worried me was the water supply.The plant has to have it as it needs a fair bit to run the plant.Also just how much of the plant/infrastructure can be constructed with the 50M or so left is another big question.

The market is saying it cant be done(with current funds) from the looks.If I was still holding my oppies Id like to see the company come clean and state uncategorically just what can be achieved WITHOUT that 50-60M.As we have seen the market hates doubt with this company.

I still see much pain ahead for the sp whilst zinc is weak.

The fact that they have been able to progress the mine so far may sit well with any potential lenders.Dont forget that this has been funded purely from equity so the company owns what has been done to date.If it had been achieved from debt the pin would have been pulled a long time ago without the ability to pay for the debt.But then they probably would have signed hedged offtakes to back any such debt.

I can still see some significants calling for the Cowboys head down the line.

d.