ZFX - Zinifex Limited

[Damuzzdu]

......they earnt $1.08billion NPAT and that was based on average zinc price of USD2105/tonne (!!) I dont think many people realise this. Thats US97c/lb.

If zinc averages USD4400/tonne which is us$2/lb (and its likely to be higher) their NPAT will be $2.3billion.

At the very minimum $2billion NPAT and $2/share dividend is likely.

Nizar,

I think it will very hard for ZFX to achieve ave price of US$2.00/lb across the whole of 06/07 financial year. As I said in my previous post the price that is in the market now is the price that ZFX gets to sell its products in around 4 months time. We are not yet at $2.00/lb so to ave $2.00/lb is just not on, IMHO. Maybe in 07/08????

As you rightly said they ave $0.97/lb last yr, yet Zn finished at $US1.63/lb at the end of June. It was only since Feb 06 that the price really spiked and thus revenues will be in this financial year.

Your $2.3B NPAT is certainly at the high end, but i agree yr $2Bill NPAT being aroud the mark. This is about the number i'm coming up with, maybe a touch less. It will depend on how ZFX treat the tax losses.

In my last post I stated that with profit of $2bill, EPS would be $5/share. This is of course incorrect. I had a figure of 400 mill. shares on issue in my head to get to that figure. Of course there 487 mill shares on issue, so it knocks the EPS down $4.13/share for 06/07. Mad at myself for making such a silly error like that. Sorry.

Using tonites p/e of 6.9, this would put a valuation of ZFX at Sept 07 of $28.49.

Cheers

 

[rederob]

Damuzzdu
You might be right on the average price issue, but I will place my faith in a figure beyond $2.
Take a look at copper prices a year ago exactly, and compare them to June 30 this year, after the copper price collapsed: Moved from $1.75 to $3.40 - almost doubled.
Do not be surprised to see zinc with a "3" immediately after the dollar sign, next year.

 

[stoxclimber]

We're getting close to the US$2/lb level (currently 1.9548/ +3.23%) with lead up 2.51%. Looks like we'll all make some more profit on paper tomorrow...hopefully at least.

 

[nizar]

Nizar,

I think it will very hard for ZFX to achieve ave price of US$2.00/lb across the whole of 06/07 financial year. As I said in my previous post the price that is in the market now is the price that ZFX gets to sell its products in around 4 months time. We are not yet at $2.00/lb so to ave $2.00/lb is just not on, IMHO. Maybe in 07/08????

As you rightly said they ave $0.97/lb last yr, yet Zn finished at $US1.63/lb at the end of June. It was only since Feb 06 that the price really spiked and thus revenues will be in this financial year.

Your $2.3B NPAT is certainly at the high end, but i agree yr $2Bill NPAT being aroud the mark. This is about the number i'm coming up with, maybe a touch less. It will depend on how ZFX treat the tax losses.

In my last post I stated that with profit of $2bill, EPS would be $5/share. This is of course incorrect. I had a figure of 400 mill. shares on issue in my head to get to that figure. Of course there 487 mill shares on issue, so it knocks the EPS down $4.13/share for 06/07. Mad at myself for making such a silly error like that. Sorry.

Using tonites p/e of 6.9, this would put a valuation of ZFX at Sept 07 of $28.49.

Cheers

Damuzzdu,

What has the zinc price averaged so far since july 1st? My guess is around us$1.60/lb? Its sitting on us$1.96/lb as i type this. If we reach us$2/lb before the end of the year (and its looking increasingly likely that will even happen before end of november) then its game on, as for sure they will increase next year. Coz the supplies are going down daily and even at this level the zinc spot price should be higher. And its good to see finally zinc get rid of following copper lead and going out on its own.

But lets just leave it at that; nobody really knows where the zinc price will go. That forecast is just my (very biased) opinion.

Yes 490million shares for ZFX.

I see you used pe of 6.9. If (or once) ZFX proves up more reserves around Century (its spending big $$ on exploration) to extend the mine-life considerably, you will see the market re-rate ZFX and pay a higher earnings multiple.

But even as it is, their earnings alone should lift the sp to $25++ by this time next year, if not earlier.

 

[Damuzzdu]

Damuzzdu,

What has the zinc price averaged so far since july 1st? My guess is around us$1.60/lb?

Nizar,
It depends on which ave you refer to?

From July til now using my data from LME then I get ave $US1.54 or $3445/tonne, but to guage anything re ZFX financials need to use from Feb 06 til now and I get US$1.42 or US$3147/tonne.

I see you used pe of 6.9. If (or once) ZFX proves up more reserves around Century (its spending big $$ on exploration) to extend the mine-life considerably, you will see the market re-rate ZFX and pay a higher earnings multiple.

The furthur exploration around the current mine at century is certainly the prize. As Greg Gailey said in his speech that if they were another mine even half the size of century the market would then stop discounting ZFX price for the mine issue and start to rate more like a BHP/RIO or even like OXR. Now even if you use a p/e of 9 (I think BHP current p/e of 9 - bit of guess here but close enuf) then you start to get share price of high $30's maybe even into the low's $40's. That may take some while, but the possibility is there.

Hey np with being biased - I've been on ZFX since about $4.30 traded it quite a few times and made a tidy sum so far, and much more to come.

Cheers
Muzz

 

[mildew79]

Vol doesn't really to matter for ZFX hey Kennas??? Seems to breakout even on just a trade of 5 mill.... reminds me of something Richkid once said "that volume is one of the worst indicators to trade by"... sure seems to be the case here. (CBH seems to live by volume though)...

Pacer, don't waste all of you money on Bourbon...

thats because their share price is directly linked to the price of zinc. they are unhedged. great stock!

 

[MiningGuru]

Moved up in afternoon after a fall in the morning follwoing the general market.

Shows there is still great demand for this share.

Could easily surge tomorrow depending on what the dow does.

 

[MiningGuru]

Look at ZFX go today!

Up over 40c!

This share will surge to around $20 very quickly indeed.

Looks as though some insto's are building stakes

 

[Out Too Soon]

Doesn't seem to matter what the DOW is doing at the moment, the DOW is flat slightly negative while zinc & negative don't go together atm.
Just wish the market would notice another emerging zinc+ play that I hold AAR.

 

[pacer]

Clowboy....

It's been my experience that stocks can get over heated and suffer as a concequence....I think 2 days of 4.5 and 5% in a row can mean trouble for the SP very short term, but I don't believe we will see a down turn, just a slowing of the % rises each day over the next few days/weeks.

Personaly I want to see 10% rises each day for the next 2 months!

Go you good thing!!!!.............

Was I right or was I right.....haha...still holding

 

[Brasidas]

Some of you are getting too bullish - zinc has a way to go but some of the stocks are getting too far ahead of themselves. This was discussed in the weekly roundup on Minesite.com with talk of insiders preparing to cash-out. Take care. Here is an extract...

That Was The Week That Was … In Australia

By Our Man In Oz

Minews. Good morning Australia, yet more records?

Oz. Just like the last time we spoke, but a rider this week that says the market might be somewhat stretched, especially when compared with what’s happening elsewhere. The word down this way is that a lot of mining stocks on AIM have run out of puff, and that’s not a good sign for the future of small-to-medium miners in Australia which have really been flying.

Minews. Two or three weeks ago I would have agreed with you. But not so much now as there are glimmers of light on AIM. Presumably the leaders remain the base metal stocks?

Oz. Very much so. Zinc is red hot, nickel not much cooler, and then we have renewed interest in the energy sector with coal stocks making an impressive return, and uranium stocks warming up as we head towards the big political showdown in April when both the government and opposition are likely to fall into line with pro-uranium policies. Capping off a remarkable week we had tremendous success from a couple of new floats, and waiting in the wings are about 16 more mining floats ready to list.

Minews. That is very interesting as AIM floats are down to a trickle, or even less. We might have a look later at who’s in your new float queue, but first a few prices, please?

Oz. You can’t go past the zinc producers, thanks to continued speculation that the world is close to running out of the stuff. Zinifex (ZFX), Perilya (PEM), CBH (CBH) and Kagara (KZL) all reached new 12-month highs during the week. Zinifex traded up to A$15.89 during Friday trade before easing to close the week at $15.88, a gain of A$1.23, or 8.4 per cent. What makes the latest price more noteworthy is that at this time last time Zinifex was trading at A$5.07, meaning the stock has risen by A$10.81 or 213 per cent in 12-months. .. more on minesite.com

 

[michael_selway]

Some of you are getting too bullish - zinc has a way to go but some of the stocks are getting too far ahead of themselves. This was discussed in the weekly roundup on Minesite.com with talk of insiders preparing to cash-out. Take care. Here is an extract...

That Was The Week That Was … In Australia

By Our Man In Oz

Minews. Good morning Australia, yet more records?

Oz. Just like the last time we spoke, but a rider this week that says the market might be somewhat stretched, especially when compared with what’s happening elsewhere. The word down this way is that a lot of mining stocks on AIM have run out of puff, and that’s not a good sign for the future of small-to-medium miners in Australia which have really been flying.

Minews. Two or three weeks ago I would have agreed with you. But not so much now as there are glimmers of light on AIM. Presumably the leaders remain the base metal stocks?

Oz. Very much so. Zinc is red hot, nickel not much cooler, and then we have renewed interest in the energy sector with coal stocks making an impressive return, and uranium stocks warming up as we head towards the big political showdown in April when both the government and opposition are likely to fall into line with pro-uranium policies. Capping off a remarkable week we had tremendous success from a couple of new floats, and waiting in the wings are about 16 more mining floats ready to list.

Minews. That is very interesting as AIM floats are down to a trickle, or even less. We might have a look later at who’s in your new float queue, but first a few prices, please?

Oz. You can’t go past the zinc producers, thanks to continued speculation that the world is close to running out of the stuff. Zinifex (ZFX), Perilya (PEM), CBH (CBH) and Kagara (KZL) all reached new 12-month highs during the week. Zinifex traded up to A$15.89 during Friday trade before easing to close the week at $15.88, a gain of A$1.23, or 8.4 per cent. What makes the latest price more noteworthy is that at this time last time Zinifex was trading at A$5.07, meaning the stock has risen by A$10.81 or 213 per cent in 12-months. .. more on minesite.com

All zinc producers goign crazy atm

thx

MS

 

[stoxclimber]

I agree - the zinc sector seems to be overreacted to very modest increases in zinc prices (albeit record highs). When I first bought ZFX I believed it was undervalued based on the PE for the risk of the company & future earnings prospects - now we're seeing the future earning prospoects increase modestly but these zinc stock prices have risen like zinc has blown out to >2.20 when we're still at 1.95. So while I still feel ZFX is undervalued I think the increased earnings prospects have been overstated by the market for the given increase in zinc, since the fundamental risk of the company is unchanged (i.e. mine life)...

Not sure what to do.

 

[pacer]

I'm not sure what to do either....collect more on the price increases or bail out and watch everyone else make the $$$$$$$

A mate asked me if inventories had climbed or the price gone down, and have any new mines opened up in the last few weeks, or expected to anytime soon...Answer- NO.....so why sell any yet?

It's a high place to fall from but there is definitely potential for them to find more zinc......get them drills moving!

This is only a medium term play for me, but I am past my sell point by a huge % so if it was to fall....I cant complain...will have got out with more than I expected.....gogogo you good thing.....

 

[stoxclimber]

Zinc prices look like they are about to hit $2 (1.9890 spot) and the inventories, as we know, should hit 100K in the next couple days...hard to sell given that both these events should generate more hype in zinc

 

[goetzuwe]

2.086 US $/lb at NY November 06,2006

now the breah throw is done
we can go in 2007 to 3,00 US $/lb

 

[goetzuwe]

I think today at NY we remain under the 100.000 t at stock line.

8:33 NY time 101350t (yesterday minus approx 2500t)

this will be a signal more for zfx

 

[chops_a_must]

I agree - the zinc sector seems to be overreacted to very modest increases in zinc prices (albeit record highs). When I first bought ZFX I believed it was undervalued based on the PE for the risk of the company & future earnings prospects - now we're seeing the future earning prospoects increase modestly but these zinc stock prices have risen like zinc has blown out to >2.20 when we're still at 1.95.

Well, it looks like it is going to get there before long. Another big rise tonight, with stocks set to run almost completely dry in the first half of next year. I can only see it going up.

The only thing that I can see putting a stop to the rise in zinc stocks, is if China starts exporting again. And that's no certainty. My bet is that it will keep rising until mid next year, anyway.

 

[pacer]

When are you going to get on?....$15....$17....$18......$20......

I can feel your buy button getting rubbed alot........you will be to late though and kick yourself later...lol

You cant say you did the wrong thing if you never played the game....never look back on a missed trade..... just learn from it...or you'll go nuts!!!!

That was 20th OCT, Price $13.50.....I'm so vain to quote myself.....but thought it interesting........I look into my crystal bourbon tumbler to see the future, and it's so bright I gotta wear shades!......lol

US $2/lb just got seriously smashed......$20+ doesn't look that far away or unrealistic by xmas anymore.

I have been a bit stressed over the last 2 weeks, as I have been increasing my holdings to abnormal levels, but this has been too good an oportunity to miss.....hope I haven't p'd to many avid ASF fans off with my ramblings.

Good luck all......

 

[Fab]

I thought the same this morning after looking at the LME but it turned at the end of the session and ZFX is down at the moment. I don't believe this trend will continue so, looks to me that a healthy correction anyway