GreatPig
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ZFX - Zinifex Limited
- Thread starter chicken
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Re: Zinifex... ZFX
If you've been listening to business news then you may have heard that ZFX has just been announced as a successful tenderer of reserve capacity to NEMMCO (National Electricity Market Management Company). This post is to explain what this is about since most probably don't know about such things (I assume). Bottom line is it doesn't materially affect the overall profitability of the business.
NEMMCO operates the electricity market and controls the dispatch of power stations in the main grid covering Qld, NSW/ACT, Vic, Tas (not yet permanently connected to the other states but about to be) and SA. Isolated areas plus WA and the NT have their own systems.
NEMMCO has been seeking additional reserve capacity in Vic/SA regions to cover a forecast shortfall this Summer (Jan 16 2006 onwards). Transmission limits (the lines are already fully loaded) preclude sourcing this from the other states. The reserve capacity offered can be either generation which is not normally available to the market or a reduction in consumption from a major user. In total NEMMCO has been seeking (and has got) 575MW across the two states. 200MW of this relates to emergency pre-commissioning operation of the Tasmania - Victoria link (Basslink) at up to one third capacity if needed in an emergency. Basslink is expected to be fully operational on a permanent basis by the end of April this year.
ZFX has offered to reduce consumption at its Port Pirie (SA) plant when requested to do so by NEMMCO. NEMMCO will only make such a request when there is an actual lack of reserve capacity in the system. Typically this would be during extreme high temperatures in Vic and SA although could also occur due to failure of transmission lines or power stations.
ZFX will be paid for reducing their load when requested. The $ amount is confidential but likely to be more than they would otherwise pay for the electricity they would have used. It most likely reflects the value of lost production.
According to statements from ZFX, the load in question is the cell room (electrolytic cells) in the zinc side of the plant. This is relatively easy to switch on and off. It acounts for 15MW of the plant's 35MW load. The rest of the plant will not be affected by this tender.
The good news here is that ZFX can probably recover the lost production over time as it is generally possible to stockpile intermediate product at plants such as this (though I'm not certain if this is the case at Port Pirie but it probably is). Assuming that the cell room isn't the bottleneck in the process (possible but unlikely since it's not particularly difficult to add small increments of capacity to a cell room whereas it is to the rest of the plant) they ought to be able to recover lost production over time.
Bottom line: They've probably just done a deal which is revenue neutral over the short term but leads to a small profit over the longer term. Not likely enough profit to meaningfully affect overall company results though. On other matters, the move is likely to be viewed favourably by the SA government which may bring some benefits at some point although that is of course not certain.
The ZFX tender covers Jan, Feb, Mar 2006. NEMMCO also expects to require additional reserves in the SA region in 2006 - Dec, 2007 - Jan, Feb, Mar, Nov, Dec, 2008 - Jan. NEMMCO will wait to see if there is a market (voluntary) response to develop new generation or reschedule maintenance etc. If that is not sufficient then they will conduct tenders for the relevant periods closer to the actual date. ZFX will need to re-tender for these periods.
If you've been listening to business news then you may have heard that ZFX has just been announced as a successful tenderer of reserve capacity to NEMMCO (National Electricity Market Management Company). This post is to explain what this is about since most probably don't know about such things (I assume). Bottom line is it doesn't materially affect the overall profitability of the business.
NEMMCO operates the electricity market and controls the dispatch of power stations in the main grid covering Qld, NSW/ACT, Vic, Tas (not yet permanently connected to the other states but about to be) and SA. Isolated areas plus WA and the NT have their own systems.
NEMMCO has been seeking additional reserve capacity in Vic/SA regions to cover a forecast shortfall this Summer (Jan 16 2006 onwards). Transmission limits (the lines are already fully loaded) preclude sourcing this from the other states. The reserve capacity offered can be either generation which is not normally available to the market or a reduction in consumption from a major user. In total NEMMCO has been seeking (and has got) 575MW across the two states. 200MW of this relates to emergency pre-commissioning operation of the Tasmania - Victoria link (Basslink) at up to one third capacity if needed in an emergency. Basslink is expected to be fully operational on a permanent basis by the end of April this year.
ZFX has offered to reduce consumption at its Port Pirie (SA) plant when requested to do so by NEMMCO. NEMMCO will only make such a request when there is an actual lack of reserve capacity in the system. Typically this would be during extreme high temperatures in Vic and SA although could also occur due to failure of transmission lines or power stations.
ZFX will be paid for reducing their load when requested. The $ amount is confidential but likely to be more than they would otherwise pay for the electricity they would have used. It most likely reflects the value of lost production.
According to statements from ZFX, the load in question is the cell room (electrolytic cells) in the zinc side of the plant. This is relatively easy to switch on and off. It acounts for 15MW of the plant's 35MW load. The rest of the plant will not be affected by this tender.
The good news here is that ZFX can probably recover the lost production over time as it is generally possible to stockpile intermediate product at plants such as this (though I'm not certain if this is the case at Port Pirie but it probably is). Assuming that the cell room isn't the bottleneck in the process (possible but unlikely since it's not particularly difficult to add small increments of capacity to a cell room whereas it is to the rest of the plant) they ought to be able to recover lost production over time.
Bottom line: They've probably just done a deal which is revenue neutral over the short term but leads to a small profit over the longer term. Not likely enough profit to meaningfully affect overall company results though. On other matters, the move is likely to be viewed favourably by the SA government which may bring some benefits at some point although that is of course not certain.
The ZFX tender covers Jan, Feb, Mar 2006. NEMMCO also expects to require additional reserves in the SA region in 2006 - Dec, 2007 - Jan, Feb, Mar, Nov, Dec, 2008 - Jan. NEMMCO will wait to see if there is a market (voluntary) response to develop new generation or reschedule maintenance etc. If that is not sufficient then they will conduct tenders for the relevant periods closer to the actual date. ZFX will need to re-tender for these periods.
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Of no consequence compared to todays announcement. Down like a sack of ****.
ZFX==PAS, same crap stock
ZFX==PAS, same crap stock
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Presumably they have learnt something about hedging since then. Hope so...dwecke2000 said:Of no consequence compared to todays announcement. Down like a sack of ****.
ZFX==PAS, same crap stock
michael_selway
Coal & Phosphate, thats it!
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dwecke2000 said:Of no consequence compared to todays announcement. Down like a sack of ****.
ZFX==PAS, same crap stock
Haha depends on what price u bought it at
yeah today was hit bad, but if zinc/lead + silver/gold/copper prices continue to rise, then things will change again, hopefully up this time
GreatPig
Pigs In Space
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Julia
In Memoriam
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Have just been reading through the last few months' comments on ZFX.
Can each of you who have had prior involvement with this stock comment on how you see its likely performance this year?
With thanks
Julia
Can each of you who have had prior involvement with this stock comment on how you see its likely performance this year?
With thanks
Julia
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Extra high trading volume 8 trading days ago. Selling pressure! Are funds etc. repositioning or is it a short term correction of some sort?
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ZFX- Zinifex Hill Tops (Platium)
StockyBailz
Hello all you Zingers out there, as you all know ZFX is been outstanding value for sum time now since July 2005 when it really took shape and headed for the sky, digging in as Zinc prices rose and now sits on top of the hill while the market corrects itself. I mean if it wasn't for ZFX I will not be here today. YAHOO brought me to Aussie stock forums, where I was introduced to likes of Chicken, Tech/a, Bullmarket, and others. Now since my time Ive been wondering were you guys got to on the subject (ZFX). I remember reading you's talking about the company's future, where do ya's think it may end up, Buy/Sell points. The one that got away from chicken and so on.
I've been doing a bit of research of my own; actually recognized the stock back in late july, $3.30 introduced to me by the Star Trader, the clever little machine that it is. Then BOOM Boom the instinct was there, it had the credendials of a successful under rated merger, and indicators suggested, that this one was going places, so bingo payed in 150 shares, a rather stoked arrangement with all fundamentals paying back into the stock, and metals going Platinum (PLA) I've had the privilege of watching the stock run to the hills, and never looked back!
Now that the stock is well mounted at $7.50 as the market corrects itself, I'm hoping and believing that ZFX the stock, is still on a high and has the potential of $20.
I'm kindly asking anyone out there who has done their homework on ZFX, where do you think the stock is heading? If you believe ZFX has over worked it potential why? Or do you agree with me that ZFX is still running to the hills?
I would really appreciate the score card!
Thanks for your time and happy trading you all.
StockyBailz
StockyBailz
Hello all you Zingers out there, as you all know ZFX is been outstanding value for sum time now since July 2005 when it really took shape and headed for the sky, digging in as Zinc prices rose and now sits on top of the hill while the market corrects itself. I mean if it wasn't for ZFX I will not be here today. YAHOO brought me to Aussie stock forums, where I was introduced to likes of Chicken, Tech/a, Bullmarket, and others. Now since my time Ive been wondering were you guys got to on the subject (ZFX). I remember reading you's talking about the company's future, where do ya's think it may end up, Buy/Sell points. The one that got away from chicken and so on.
I've been doing a bit of research of my own; actually recognized the stock back in late july, $3.30 introduced to me by the Star Trader, the clever little machine that it is. Then BOOM Boom the instinct was there, it had the credendials of a successful under rated merger, and indicators suggested, that this one was going places, so bingo payed in 150 shares, a rather stoked arrangement with all fundamentals paying back into the stock, and metals going Platinum (PLA) I've had the privilege of watching the stock run to the hills, and never looked back!
Now that the stock is well mounted at $7.50 as the market corrects itself, I'm hoping and believing that ZFX the stock, is still on a high and has the potential of $20.
I'm kindly asking anyone out there who has done their homework on ZFX, where do you think the stock is heading? If you believe ZFX has over worked it potential why? Or do you agree with me that ZFX is still running to the hills?
I would really appreciate the score card!
Thanks for your time and happy trading you all.
StockyBailz
michael_selway
Coal & Phosphate, thats it!
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Jay-684 said:
Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 35.9 148.5 188.6 141.6
DPS 4.0 30.0 50.0 29.5
EPS(c) PE Growth
Year Ending 30-06-06 148.5 5.7 313.9%
Year Ending 30-06-07 188.6 4.5 27.0%
Yeah those might be a bit out dated but the forecasts are updated
Main reason why they have "average" hold is that ZFX is very leveraged zinc prices. Although its going up and will probably for the next few yrs, in the very very long term zinc prices will drop (they say). Thus when they "value" ZFX they must have used forecast EPS for 10 yrs or more etc.
michael_selway
Coal & Phosphate, thats it!
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Jay-684 said:thanks for that!
cleared it up for me, as most things I've read about ZFX in the ST is positive, Comsecs figures just didnt confirm that enough for me
actually the figures (forecast EPS/foreward PE of under 5!) and outlook for Zinc are very positive fundamentally imo, just that not all the brokers agree!
thx
MS
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michael_selway
Coal & Phosphate, thats it!
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nizar said:
Yep, the onyl bad thing about them is the hit in extra stripping costs recently for the century mine
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dwecke2000 said:Of no consequence compared to todays announcement. Down like a sack of ****.
ZFX==PAS, same crap stock
ZINIFEX just got payed again recently and it looks like its on another one of its ventures. I wonder which mounain it wants to conquer this time.
Its not Zinc - Gold I say I say Gold.
Stock'ie'bailz
Kipp
Lord of the Ledgers
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Anyone know the current Zn reserves for Zinifex- and therefore the potential mine life at Century?
And how leveraged are their Zinc Sales- what I mean is, do Zinc producers sell Zinc shipments at the current market rates? Or are they locked into Contracts at a set price? I think MCR has a third of their Nickel production hedged to a set price, and then the remainder will fluctuate with the market... is it the same story with ZFX?
And finally, does anyone actually believe that the LME Zinc stocks will be depleted to zero?
And how leveraged are their Zinc Sales- what I mean is, do Zinc producers sell Zinc shipments at the current market rates? Or are they locked into Contracts at a set price? I think MCR has a third of their Nickel production hedged to a set price, and then the remainder will fluctuate with the market... is it the same story with ZFX?
And finally, does anyone actually believe that the LME Zinc stocks will be depleted to zero?
professor_frink
Moderator
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after today's performance I think beer and dancing is in order!
:drink: :dance:
:drink: :dance:
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Hi folks,
ZFX ..... expecting it to hit a brick wall,
on 18 May 2006 ..... ???
Chart for ZFX, at:
Click here for ZFX chart .....
have a great weekend
yogi
