ZFX - Zinifex Limited

[Kipp]

Don't really understand how TZN can go mental today and ZFX slip at the same time- aren't they in a JV with ZFX in a 70% stake?
Zn price also sitting pretty at $1.55/lb, but ZFX down to $10.60 today... please explain.

 

[powerkoala]

Light profit takings?
as Zinc price ease a bit?

 

[clowboy]

Can someone please clarify this for me.....

In today presentation (that was realesed to the market) ZFX stated that each $0.01 movement in currency was worth $15,000,000 to there botom line.

My calculations bring that to $150,000,000 per 1 cent fluctuation.

However there latest first half profits where $226,000,000.

Surely there is an error or am i missing something. A month ago the AUD/USD was at around $0.72 and now it is at around $0.77 surely this doesnt represent a $750,000,000 loss on there bottom line?

Does it?

 

[profithunter]

$0.01 = 1cent

 

[clowboy]

He He yea.....


Someone want to delete my post so I don't look like a dumbass

 

[RichKid]

He He yea.....


Someone want to delete my post so I don't look like a dumbass

Well then we wouldn't be able to know that Profithunter is on the ball!! But at least you're checking these details Clowboy rather than just swallowing it all.

 

[ctp6360]

This one is doing really really well for me, and it doesn't look like its slowing down. I was really pleased it bounced back yesterday which makes me think yesterday's drop was accounted for by the general market sentiment.

 

[nizar]

This one is doing really really well for me, and it doesn't look like its slowing down. I was really pleased it bounced back yesterday which makes me think yesterday's drop was accounted for by the general market sentiment.

This has a long way to go

2007 forecast earnings are $2+

Could reach $20 by years end on fundamentals alone, speculation could drive it further still

 

[michael_selway]

Can someone please clarify this for me.....

In today presentation (that was realesed to the market) ZFX stated that each $0.01 movement in currency was worth $15,000,000 to there botom line.

My calculations bring that to $150,000,000 per 1 cent fluctuation.

However there latest first half profits where $226,000,000.

Surely there is an error or am i missing something. A month ago the AUD/USD was at around $0.72 and now it is at around $0.77 surely this doesnt represent a $750,000,000 loss on there bottom line?

Does it?

yeah its actually 1c as profithunter has said

although its average exchange rate per period which is of importance

Nizar yeah, also ZFX is the only one thats paying ok dividends for these kind of stocks

Zinc Majors: ZFX, PEM, KZL, TZN, CBH , OXR
Zinc Minors: HER, AIM, JML, INL, UCL, AUL

thx

MS

 

[michael_selway]

http://www.macquarie.com.au/wasp/dailytrader/dailytrader_dttradingpickofday_1.htm

Trading Pick of the Day
05 May 2006

ZFX: Zinc Price Leverage Continues to Remain Key

Zinifex CEO, Greg Gailey, presented at the Macquarie Securities Conference in Sydney this morning, and highlighted that the key issue for the company remains its strong leverage to the zinc price. Given MRE’s expectation that zinc will be in deficit for a number of years to come, and anticipating that the zinc price will spike above US$1.50/lb later this year, MRE expect that the Zinifex share price should remain strong throughout the year. ZFX shares have gained almost 300% in the past 12 months due to the extremely large increase in the zinc metal prices.

Zinc outlook robust
ZFX painted a positive outlook for zinc markets, highlighting falling zinc stocks, and the difficulties that producers face in growing supply. Furthermore, in light of appreciating operating and capital costs, ZFX indicated that the long term zinc price may need to rise beyond US$1300/t (~58c/lb) to provide sufficient incentive for new supply.

Cost pressure to continue
Cost pressure will continue. ZFX provided recent guidance that y-o-y operating costs would increase by ~10%.

Looking for growth
As is well known in the market, one of ZFX's key strategic goals is to renew and grow the mining base. Today's presentation included a strong focus on explaining the company's efforts to add to it's resource/reserve base. Following on from consistent strong drill results at Rosebery, a Rosebery extension was discretely identified as a separate project, adding ~2mt of resources (with drilling ongoing). The comment was made that the development of the Rosebery expansion and of the Dugald River project (expected commissioning by 2010 if approved) would add at least five years to ZFX's mine production (ie to beyond 2020). In MRE’s view, approval of such extensions is likely to add significantly to NPV.

Dividends
Commenting on dividends, against the backdrop of the significant cash flow the company is forecast to generate, Greg Gailey again reiterated the policy that the company will return to shareholders cash that is excess to the company's requirements. In the absence of any corporate activity, or other significant new capital expenditure, MRE expect ZFX to generate ~A70-80cps of free cash flow in JuneH06.

Action and recommendation
Zinifex remains supremely leveraged to one of MRE’s favoured commodities in zinc. Thus far over it's two year life, the stock has traded largely in line with the A$ denominated zinc price and MRE expect this relationship to continue. Given MRE’s expectation that zinc will be in deficit for a number of years to come, MRE anticipate the zinc price will spike above US$1.50/lb later this year, and accordingly expect that Zinifex may trade above MRE’s 12 month price target of A$11.00ps.

Given the ~460% increase in the stock price over the past two years, the relatively higher cost base of some of the company's assets, and the significant single asset risk to earnings, MRE believe the risk/reward trade off for this stock justifies a neutral recommendation (despite MRE’s view that the stock could trade higher in the short term). With this in mind, any significant change to MRE’s outlook for the zinc price could have significant implications for MRE’s view on the trading range of ZFX.

Traders looking for maximum exposure to short-term movements in the ZFX should consider the following equity warrants for a high-risk, high-return strategy.

Investors and traders looking for short to medium-term leveraged exposure to ZFX should consider Macquarie Instalments for a higher risk, higher return alternative to direct share investment.

 

[Jay-684]

good positive growth today!

obviously from the rise in Zinc

lets hope this stellar run continues!

 

[Kipp]

good positive growth today!

obviously from the rise in Zinc

lets hope this stellar run continues!

Yup, it's only when I compare it to CBH that I start to feel greedy
but a good sign that ZFX closed as intraday high, so it might kick on tomorrow...

 

[clowboy]

Comodity prices aren't looking healthy ATM though. Zinc in particular, hope it bounces back

 

[Jay-684]

up over 27% so far this month!

is it purely being pushed up by the rising zinc price or are there other factors.

also up 300% since March 05 when I bought @ 3.30

so very happy indeed!

 

[Kipp]

up over 27% so far this month!

is it purely being pushed up by the rising zinc price or are there other factors.

also up 300% since March 05 when I bought @ 3.30

so very happy indeed!

Remember Jay, traders are meant to remain unemotional... but 4x gain I can't say I blame you!!! Will be another pyscho day tomorrow for Zinni as Zn up again tonight (~1.70/lb) easy money.

 

[michael_selway]

Remember Jay, traders are meant to remain unemotional... but 4x gain I can't say I blame you!!! Will be another pyscho day tomorrow for Zinni as Zn up again tonight (~1.70/lb) easy money.

Yeah its funny how nickel has crashed but....

thx

MS

 

[ilikegirls]

worth jumping on this one now or waiting a little longer for the market to stabalise as well as commodities?

thanks...

B.

 

[silence]

I'd probably wait a day or 2 to see what the market seems to be doing.

 

[lbaz9]

I'd wait until the end of the week and see what happens with the commodities. I wouldn't be selling if I held the stock, but averaging down. The long term is still good for the miners I think.

 

[michael_selway]

worth jumping on this one now or waiting a little longer for the market to stabalise as well as commodities?

thanks...

B.

I think thsi might turn out to be a good buying opportunity when dust settles, so fortunately for some like yourself. It happened in Feb 06 so i cant see why this wouldnt be the same. Heading into 2007/2008 would imo be the danger years for an irrecoverable crash

Zinc Majors: ZFX, PEM, KZL, CBH , TZN, OXR
Zinc Minors: HER, AIM, JML, INL, UCL, AUL

thx

MS