KZL - Kagara Limited

[nlatter]

Re: KZL - Kagara Zinc capital raising

Hi guys,

Im not terribly savvy in this issue but maybe someone can help me out.

As the previous post says the average price in the last week or two was like 1.14 or something like that and is now .75 at weeks end.

Am I looking at this the right way? Say I were take up the offer by friday and then in the next day of trading they were say 0.90c you would almost instantly make a 50% gain from buying them @ .60c .

Again am I looking at this correct?

Cheers

 

[Boggo]

Re: KZL - Kagara Zinc

Thank you J B Nimble.

Well done. Next few days/weeks should be a confirmation either way then.

Cheers.

 

[J.B.Nimble]

Re: KZL - Kagara Zinc capital raising

Hi guys,

Im not terribly savvy in this issue but maybe someone can help me out.

As the previous post says the average price in the last week or two was like 1.14 or something like that and is now .75 at weeks end.

Am I looking at this the right way? Say I were take up the offer by friday and then in the next day of trading they were say 0.90c you would almost instantly make a 50% gain from buying them @ .60c .

Again am I looking at this correct?

Cheers

You are correct. The discount is the incentive to entice investors to stump up the much needed funding. This has some fairly predictable outcomes if you take a moment to study the chart over the last couple of weeks.

Following the trading halt and announcement, the sp was immediately sold down to 0.90 on huge volume. Everyone has their reasons but, for some it would have been a mixture of reaction to the depth of discount and the volume of funds sought and hence the amount to be stumped up to take advantage of it. For others it may have looked like an opportunity to trade out and buy back lower before record date. Whatever the case there were plenty of others willing to buy in before the offer went ex.

Following the record date, the next phase sets in as (a) some players take their profit knowing that they are buying replacement shares at 0.60 (and in some cases need to free up the funds to participate), and (b) others being aware of this sell pressure anticipate the drop and trade the trend. We also had a bit of general down-draft in the market. End result is that following the ex-date we open at 0.84, slide down to 0.65'ish and then start to recover to our last close at 0.745. Maybe this continues to trend up, or maybe we experience another wave of sell pressure when the issue comes through.

Now none of this tells you what a KZL share is really worth. It is only giving you an understanding of how the market reacted to the share offer. For an understanding of the value of a KZL share you would have to look at all the fundamentals - quantity and grade of reserves, cost of production, outlook for their commodities, balance sheet strength, quality of management, offtake arrangements, growth opportunities, etc, etc, etc. Only then can you make an assessment of value and where you think this might go in these still fairly uncertain times.

In the extreme uncertainty of late last year they looked like roadkill and had a sp to match this outlook. This discount started to ease as the survival prospects became more encouraging (metals price increases, equity injections from substantial shareholders, Mungana IPO plans, general market rally, Lounge lizard agreement with WSA). When this cap raise is done they will have balance sheet strength and some good development prospects. Where the underlying value goes from here largely depends on sustainability of metals prices. Where the sp goes from week to week is probably another matter altogether.

For the record, I am a born and bred, unrelenting, and unapologetic optimist so you should discount my views accordingly...

 

[nlatter]

Re: KZL - Kagara Zinc

Thanks J.B

Well I was thinking, based on what happens with the price in the next few days. If you were to set a stop above .60 then you cant loose, well your risk is significantly lower. Which I guess is the idea. If you were logical about it why wouldn't you do it?

Am I thinking straight or is it naive.

Cheers

 

[J.B.Nimble]

Re: KZL - Kagara Zinc

Thanks J.B

Well I was thinking, based on what happens with the price in the next few days. If you were to set a stop above .60 then you cant loose, well your risk is significantly lower. Which I guess is the idea. If you were logical about it why wouldn't you do it?

Am I thinking straight or is it naive.

Cheers

A couple of things here...

Firstly, your entitlement to buy is dependent only on having been a holder on the record date (June 15) There is nothing to stop you from selling your existing holding now and replacing it by buying your entitlement at 0.60.

And yes there is a possible loss scenario in here. The close date for the offer is Friday July 3. The allotment date is July 10. If the sp dips below 0.6 between the time of sending off your money and being issued the shares then you will be looking at a paper loss before you have a chance to get out. A stop cannot help you until you have the shares available to sell.

 

[nlatter]

Re: KZL - Kagara Zinc

Ahh that was another thing I wanted to know... The allotment date.

Thanks, please update anything that comes up.

A couple of things here...

Firstly, your entitlement to buy is dependent only on having been a holder on the record date (June 15) There is nothing to stop you from selling your existing holding now and replacing it by buying your entitlement at 0.60.

And yes there is a possible loss scenario in here. The close date for the offer is Friday July 3. The allotment date is July 10. If the sp dips below 0.6 between the time of sending off your money and being issued the shares then you will be looking at a paper loss before you have a chance to get out. A stop cannot help you until you have the shares available to sell.

 

[legs]

Re: KZL - Kagara Zinc

Anyone who got the allotment @ 60 cents would be laughing now no?

Over 50% at this stage. I got my bit and now comes the tough decision about what to do with them. Hold or sell?

Ideas?

They are in my balanced Super Portfolio.

 

[UMike]

Re: KZL - Kagara Zinc

having sold most of my holdings on the way up I only had the opportunity to buy 3000 in my allotment. However i bought consistantly on the way down.

With the pre diluted stock reaching about $1.50 and with Lead, Zinc and Nickle among others at lower prices than today I don't expect to sell my first lot before $1.20 is reached. When that'll be is anyones guess.

Good luck to all and stay true to your own trading plans.

 

[legs]

Re: KZL - Kagara Zinc

I would have thought next target is $1.25??? It has gone fast the last few days, thereofre it may take a breather but I wouldn't think it would drop much before 1.25

 

[legs]

Re: KZL - Kagara Zinc

Took another giant step towards 1.25 today after an outstanding quarterly report suggesting nearly Net Zero debt and production ramping up. Some good resource finds too.

 

[UMike]

Re: KZL - Kagara Zinc

Nothing short of stunning imo.

How it dropped to around 62c after the SPP is beyond me.

Pity I was to nervous to buy more.
Will ride this longer than I thought I would.

 

[legs]

Re: KZL - Kagara Zinc

Nothing short of stunning imo.

How it dropped to around 62c after the SPP is beyond me.

Pity I was to nervous to buy more.
Will ride this longer than I thought I would.

having sold most of my holdings on the way up I only had the opportunity to buy 3000 in my allotment. However i bought consistantly on the way down.

With the pre diluted stock reaching about $1.50 and with Lead, Zinc and Nickle among others at lower prices than today I don't expect to sell my first lot before $1.20 is reached. When that'll be is anyones guess.

Good luck to all and stay true to your own trading plans.

So its 1.20..you getting nervous Mike??

I am up 99% now but I will be using tight stops i think. i WORKED TOO HARD TO GET WHERE IT IS...ACTUALLY WAS VERY SIMPLE.

 

[UMike]

Re: KZL - Kagara Zinc

So its 1.20..you getting nervous Mike??

I am up 99% now but I will be using tight stops i think. i WORKED TOO HARD TO GET WHERE IT IS...ACTUALLY WAS VERY SIMPLE.

Absolututely.

I never thought it'd break $1.20 so quick with potentially a lot of investors happy to make exactly double their SPP.

Prior to 12:00 I was thinking of getting rid of half for $1.175. Lucky I didn't.
Kitco has all rellevent metals up atm so here is hoping fo a great day tomorrow.

I am not about to spec on where KZL will go however I just parted with $15,000 in a CBH SPP with the knowledge that I would of been better spent on KZL :lol:

Good luck too all holders.

 

[legs]

Re: KZL - Kagara Zinc

Metals, Oil, Stocks Advance as Chinese Manufacturing Expands

By Stuart Wallace

Aug. 3 (Bloomberg) -- Metals and oil rose, while commodity stocks led the MSCI World Index up for a third day after Chinese manufacturing expanded at the fastest pace in a year.

Copper reached its highest price since October, with nickel and zinc at their strongest levels since September. Crude traded above $70 a barrel for the first time in a month. The MSCI World Index, a gauge of 23 developed markets, added 1 percent at 11:09 a.m. in London, as HSBC Holdings Plc’s first-half profit beat analysts’ estimates. Futures on the Standard & Poor’s 500 Index gained 1.1 percent. The yen fell against all 16 most-traded currencies.

The CLSA China Purchasing Managers’ Index in China, the world’s biggest consumer of copper and aluminum, rose to a seasonally adjusted 52.8, from 51.8 in June. Commodity prices may extend their rally in 2010 as the global slump abates, said Nouriel Roubini, the New York University professor who predicted the financial crisis. Economists predict U.S. manufacturing probably contracted at the slowest pace in 11 months in July.

“Asia will come out of the recession sooner and help the rest of the world,” said Sintje Diek, an analyst with HSH Nordbank in Hamburg. “We have had economic indicators that were better than expected, the overall data is pointing to better developments in the coming weeks and months.”

Shares of basic-resource companies and banks led the 1.7 percent rally in Europe’s Dow Jones Stoxx 600 Index. BHP Billiton Ltd., the world’s biggest mining company, gained 2.8 percent in London, while Rio Tinto Group, the third-largest, added 4.8 percent.

 

[legs]

Re: KZL - Kagara Zinc

Can it reach 1.20 again?

Up nicely today 6%.. has been a bit dissapointing of late. Maybe the 1.20 is a resistance level.

 

[lioness]

Re: KZL - Kagara Zinc

This is breakout is it not??

Funny how no-one here is interested anymore, we should see continued strength from here. Looks like 1.60 target.

 

[UMike]

Re: KZL - Kagara Zinc

This is breakout is it not??

Funny how no-one here is interested anymore, we should see continued strength from here. Looks like 1.60 target.

I wish!

I have no idea how you can come to such a target but I have so many I'd be wrapped to see it get there. Still seems like more sellers than buyers.

Used to like it for it's volitility but it has been so steady that it is scaring me.

I've got an order to sell 1/3 at $1.145 (previously wanted a $1.25 for it)..... We'll see how it goes.

 

[lioness]

Re: KZL - Kagara Zinc

I wish!

I have no idea how you can come to such a target but I have so many I'd be wrapped to see it get there. Still seems like more sellers than buyers.

Used to like it for it's volitility but it has been so steady that it is scaring me.

I've got an order to sell 1/3 at $1.145 (previously wanted a $1.25 for it)..... We'll see how it goes.

An order to sell, you must have rocks in your head giving away easy profit. Good luck, hope you won't regret it. I will check back in here in a few days to see how you went.

 

[UMike]

Re: KZL - Kagara Zinc

An order to sell, you must have rocks in your head giving away easy profit. Good luck, hope you won't regret it. I will check back in here in a few days to see how you went.

I still don't know what you base this on.

On the 20/10/2009 I sold a lot for $1.125 and bought 'em back at $1.05 a few days later

Don't see any reason for a breakout or why I can't continue this ~10% buy / sell strategy.

C ya in a few days

 

[legs]

Re: KZL - Kagara Zinc

I still don't know what you base this on.

On the 20/10/2009 I sold a lot for $1.125 and bought 'em back at $1.05 a few days later

Don't see any reason for a breakout or why I can't continue this ~10% buy / sell strategy.

C ya in a few days

If it works stick to it, however after CGT i'd prefer to hang untilthey make more than 10%, but then again it depends on your holding doesn't it. Horses for courses I say.