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This info definitely relates to BHP not ZFX!!!!!!
ZFX - Zinifex Limited
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redandgreen said:
Sorry this is the zfx research
Mixed DecQ Production - Mine production was up 5% to 143kt driven by record Century throughput, but offset by 2% lower metal production following roaster outages at Clarksville. Sales were also 4kt below production at Clarksville and Budel driven by auto sector weakness and stock build pre-maintenance. We maintain our Buy recommendation with a new target price of A$21.00/share.
Earnings Downgrade - Interim estimate trimmed 5% to A$745m on inventory build and production issues at Clarksville. Lower NPAT and working capital build has reduced our dividend by A30¢ to A90¢/share. FY07 estimate also downgraded 3% to A$1.75b due to the ongoing roaster issues at Clarksville.
Zinc Still the One - Although concerned by the sudden spike in Chinese zinc exports, we believe this is only a data point and expect the market to remain in deficit in 2007 with a price forecast of US$2/lb. Zinifex also expect premia to more than double in 2007 to US$260+/t in the US and US$300+/t in Europe.
Positive Exploration Results - Encouraging high-grade Rosebery exploration results to the north should increase resources and provide production flexibility from mining an additional lens. Drilling of the Page Creek deposit on the Century lease has also intersected mineralization, but assay results are pending.
Restructuring Upside - In addition to the favoured zinc leverage, attractive yield and continued positive news flow on exploration, we expect the spin-off of the smelter assets with Umicore (ACUMt.BR - €133.8; 1M) to un-lock further value in Zinifex through 2007.
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Zn down on Kitco 7am (alas)
Zinc February 07,13:11
Bid/Ask 1.4232 - 1.4323
Change -0.0380 -2.60%
Low/High 1.3823 - 1.4703
From The Australian http://www.theaustralian.news.com.au/story/0,20867,21189918-643,00.html
"Zinifex to grow out of reach Andrew Trounson February 08, 2007
LEAD and zinc giant Zinifex's chief executive Greig Gailey came out swinging yesterday, denying the company is a sitting duck for a takeover.
In an address to the Melbourne Mining Club, he vowed an aggressive expansion of his mining business and reassured investors that the outlook for prices was strong despite a recent pull-back.
Zinifex has been seen as a takeover target since late last year, when it agreed to merge its smelting assets with those of Belgium-based Umicore.
Mr Gailey noted that Swiss-based Xstrata and its 40 per cent shareholder, commodity trading giant Glencore, had been acquiring zinc assets, but said he was determined that Zinifex be a winner in a necessary consolidation of the industry, not a victim.
"We need to vigorously grow our company if we are to survive as an independent," Mr Gailey said. "If we don't, we risk being in someone else's plans for consolidation."
But Mr Gailey will be hoping that the string of hiccups affecting his operations doesn't become a trend.
In the company's latest misadventure, its loading vessel Wunma was disabled in the Gulf of Carpentaria yesterday morning, after taking in water in high seas stirred by cyclone Nelson.
The Wunma ferries zinc concentrate from Zinifex's Century zinc mine in Queensland to bulk carriers, and carries a $US15 million ($19.3 million) load.
While the vessel and concentrate will be returned to Karumba port and the cargo dried, if the ship is badly damaged, it could take weeks to repair or replace. There is a possibility that an extended delay could force a temporary production shutdown at Century, though the company has storage capacity for at least one week at the port. .....etc"
May see zfx red today, but maybe maybe a buy opportunity???
Zinc February 07,13:11
Bid/Ask 1.4232 - 1.4323
Change -0.0380 -2.60%
Low/High 1.3823 - 1.4703
From The Australian http://www.theaustralian.news.com.au/story/0,20867,21189918-643,00.html
"Zinifex to grow out of reach Andrew Trounson February 08, 2007
LEAD and zinc giant Zinifex's chief executive Greig Gailey came out swinging yesterday, denying the company is a sitting duck for a takeover.
In an address to the Melbourne Mining Club, he vowed an aggressive expansion of his mining business and reassured investors that the outlook for prices was strong despite a recent pull-back.
Zinifex has been seen as a takeover target since late last year, when it agreed to merge its smelting assets with those of Belgium-based Umicore.
Mr Gailey noted that Swiss-based Xstrata and its 40 per cent shareholder, commodity trading giant Glencore, had been acquiring zinc assets, but said he was determined that Zinifex be a winner in a necessary consolidation of the industry, not a victim.
"We need to vigorously grow our company if we are to survive as an independent," Mr Gailey said. "If we don't, we risk being in someone else's plans for consolidation."
But Mr Gailey will be hoping that the string of hiccups affecting his operations doesn't become a trend.
In the company's latest misadventure, its loading vessel Wunma was disabled in the Gulf of Carpentaria yesterday morning, after taking in water in high seas stirred by cyclone Nelson.
The Wunma ferries zinc concentrate from Zinifex's Century zinc mine in Queensland to bulk carriers, and carries a $US15 million ($19.3 million) load.
While the vessel and concentrate will be returned to Karumba port and the cargo dried, if the ship is badly damaged, it could take weeks to repair or replace. There is a possibility that an extended delay could force a temporary production shutdown at Century, though the company has storage capacity for at least one week at the port. .....etc"
May see zfx red today, but maybe maybe a buy opportunity???
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This has to be good news for somebody?
http://www.theaustralian.news.com.au/story/0,20867,21189891-643,00.html
BASE metal miner Zinifex's run of bad luck continued yesterday when it was forced to abandon an ocean freighter with $US15 million ($A19.28 million) in zinc concentrate on board as Tropical Cyclone Nelson whipped up high seas.
At 5.45am yesterday the captain of Zinifex's transfer vessel MV Wunma, based at Karumba in far north Queensland, issued a distress call when the ship took on water and the engine failed in the severe storm.
The payload of 5000 tonnes of zinc concentrate, worth $US15 million at present prices of $US3000/tonne, is now anchored and stable 45km offshore with no power or communications.
The shipment was on its way to a partly loaded deep-sea vessel heading to China but the company may well declare force majeure and redirect the load to one of its own smelters.
The vessel and cargo are insured and the 10-person crew were winched to safety yesterday. The company does not expect any production losses from the incident.
http://www.theaustralian.news.com.au/story/0,20867,21189891-643,00.html
BASE metal miner Zinifex's run of bad luck continued yesterday when it was forced to abandon an ocean freighter with $US15 million ($A19.28 million) in zinc concentrate on board as Tropical Cyclone Nelson whipped up high seas.
At 5.45am yesterday the captain of Zinifex's transfer vessel MV Wunma, based at Karumba in far north Queensland, issued a distress call when the ship took on water and the engine failed in the severe storm.
The payload of 5000 tonnes of zinc concentrate, worth $US15 million at present prices of $US3000/tonne, is now anchored and stable 45km offshore with no power or communications.
The shipment was on its way to a partly loaded deep-sea vessel heading to China but the company may well declare force majeure and redirect the load to one of its own smelters.
The vessel and cargo are insured and the 10-person crew were winched to safety yesterday. The company does not expect any production losses from the incident.
Warning was given Zinifex barge would sink in cyclone
8/2/07:
The operators of a barge abandoned on Wednesday in wild seas in the Gulf of Carpentaria had been warned in an academic report in 2002 there was a high risk it would spill its load or sink in a cyclone.
Ten crew members of MV Wunma were winched to safety by two rescue helicopters at 1pm (AEST) on Wednesday in heavy seas in the Gulf of Carpentaria caused by Cyclone Nelson.
They were returned to land in Normanton, in far north Queensland, and were not injured in the ordeal.
MV Wunma, owned by mining company Zinifex, sent out a distress call about 10.30pm (AEST) on Tuesday after it began taking on water and suffering engine trouble as the cyclone hit.
The stricken vessel is carrying about 5,000 tonnes of zinc concentrate, and rescuers have warned it will likely sink.
The incident was an inevitable result of operating the 113-metre vessel in a cyclone prone area, according to University of Sydney marine biologist Peter Cowell.
Dr Cowell was commissioned on behalf of the Carpentaria Land Council in 2002 to report on a Queensland Environmental Protection Agency (EPA) risk analysis of the Wunma cyclone contingency plan.
Pasminco was at that time operating the Wunma.
Dr Cowell's report found the EPA's risk analysis had been flawed and put the risk of such an event too low.
"There's actually quite a few tropical cyclones (that) travel over the Gulf of Carpentaria and each and every one is going to potentially put this ship at risk," Dr Cowell told reporters.
"Whereas they (EPA) said over many decades there's a tiny risk that something would go wrong, my assessment was that every year there was a high probability that it'd happen.
"So year-on-year the probability goes even greater that eventually it'd happen.
"I did that report in 2002, it's now the beginning of 2007 and it's happened."
He said if the barge was salvaged and continued to operate, it would sink again in the future, possibly with even worse results.
"(You have) got to bear in mind that this cargo is environmentally toxic and it's operating in an area with dugongs and prawn fisheries and a very complex and rather pristine ecosystem," Dr Cowell said.
"You've got to invest sufficient money in an adequate plan to keep the risks low.
Comment was being sought from the EPA.
Any thoughts on this article? Unsure if it's a current representation.
8/2/07:
The operators of a barge abandoned on Wednesday in wild seas in the Gulf of Carpentaria had been warned in an academic report in 2002 there was a high risk it would spill its load or sink in a cyclone.
Ten crew members of MV Wunma were winched to safety by two rescue helicopters at 1pm (AEST) on Wednesday in heavy seas in the Gulf of Carpentaria caused by Cyclone Nelson.
They were returned to land in Normanton, in far north Queensland, and were not injured in the ordeal.
MV Wunma, owned by mining company Zinifex, sent out a distress call about 10.30pm (AEST) on Tuesday after it began taking on water and suffering engine trouble as the cyclone hit.
The stricken vessel is carrying about 5,000 tonnes of zinc concentrate, and rescuers have warned it will likely sink.
The incident was an inevitable result of operating the 113-metre vessel in a cyclone prone area, according to University of Sydney marine biologist Peter Cowell.
Dr Cowell was commissioned on behalf of the Carpentaria Land Council in 2002 to report on a Queensland Environmental Protection Agency (EPA) risk analysis of the Wunma cyclone contingency plan.
Pasminco was at that time operating the Wunma.
Dr Cowell's report found the EPA's risk analysis had been flawed and put the risk of such an event too low.
"There's actually quite a few tropical cyclones (that) travel over the Gulf of Carpentaria and each and every one is going to potentially put this ship at risk," Dr Cowell told reporters.
"Whereas they (EPA) said over many decades there's a tiny risk that something would go wrong, my assessment was that every year there was a high probability that it'd happen.
"So year-on-year the probability goes even greater that eventually it'd happen.
"I did that report in 2002, it's now the beginning of 2007 and it's happened."
He said if the barge was salvaged and continued to operate, it would sink again in the future, possibly with even worse results.
"(You have) got to bear in mind that this cargo is environmentally toxic and it's operating in an area with dugongs and prawn fisheries and a very complex and rather pristine ecosystem," Dr Cowell said.
"You've got to invest sufficient money in an adequate plan to keep the risks low.
Comment was being sought from the EPA.
Any thoughts on this article? Unsure if it's a current representation.
eMark said:
Re above news story....
Source: AAP NewsWire
http://www.industrysearch.com.au/news/viewrecord.aspx?id=24120
Kauri
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Without attempting to predict price targets ZFX has reached a Typical WC and Typical W4 confluent area, suggesting a possible area where a reversal may occur. With todays action also signalling a possible reversal I have moved my stop closer waiting on Monday to see if it produces confirming price/vol action.
Attachments
For all the Zfx fans from the citigroup site
Company In-Depth
Volatility Creates Opportunity
Zinc Price Downgrade - We have downgraded our FY07 estimate by 9% to A$1.58b driven by lower 1H07 zinc prices, down 14% to US$1.72 ¢/lb, We have also lowered our 2H dividend to A$1.10, previously A$1.50/share. Despite the downgrade, Zinifex remains our preferred base metal exposure driven by a zinc market deficit & higher 2H07 zinc prices, smelter spin-off and exploration.
But Still Our Pick - Zinc prices are down ~25% year to date driven by base metal turbulence and a Chinese export driven spike in LME inventories in January. However, LME inventories have since fallen 5% and we do not expect China to become a structural net exporter of zinc. We forecast another deficit in the zinc market for 2007, with a higher average 2H07 price of US$2/lb.
Century Risk - There is risk to Century production from loss of the cyclone damaged transfer vessel that is critical to the pipeline/port transport system. Damage and ability to secure a replacement vessel are being assessed, but Century can operate until end February, and smelters end March, based on stockpile capacity and inventories. A week's lost production is ~10kt of zinc.
Smelter Spin-off - Regulatory approvals and due diligence are progressing for the signing of a binding agreement in 1H, for execution in the 2H, for the proposed smelter spin-off with Umicore (ACUMt.BR - €142.6; 1M). If we were to apportion our FY07 and FY08 Zinifex estimate between the "mining" and "smelting" assets based on EAT and EBITDA contribution, and then put the two components on peer group multiples, it would imply a share price for Zinifex of A$18-22/share.
Company In-Depth
Volatility Creates Opportunity
Zinc Price Downgrade - We have downgraded our FY07 estimate by 9% to A$1.58b driven by lower 1H07 zinc prices, down 14% to US$1.72 ¢/lb, We have also lowered our 2H dividend to A$1.10, previously A$1.50/share. Despite the downgrade, Zinifex remains our preferred base metal exposure driven by a zinc market deficit & higher 2H07 zinc prices, smelter spin-off and exploration.
But Still Our Pick - Zinc prices are down ~25% year to date driven by base metal turbulence and a Chinese export driven spike in LME inventories in January. However, LME inventories have since fallen 5% and we do not expect China to become a structural net exporter of zinc. We forecast another deficit in the zinc market for 2007, with a higher average 2H07 price of US$2/lb.
Century Risk - There is risk to Century production from loss of the cyclone damaged transfer vessel that is critical to the pipeline/port transport system. Damage and ability to secure a replacement vessel are being assessed, but Century can operate until end February, and smelters end March, based on stockpile capacity and inventories. A week's lost production is ~10kt of zinc.
Smelter Spin-off - Regulatory approvals and due diligence are progressing for the signing of a binding agreement in 1H, for execution in the 2H, for the proposed smelter spin-off with Umicore (ACUMt.BR - €142.6; 1M). If we were to apportion our FY07 and FY08 Zinifex estimate between the "mining" and "smelting" assets based on EAT and EBITDA contribution, and then put the two components on peer group multiples, it would imply a share price for Zinifex of A$18-22/share.
Kauri
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This move down may well have been a zigzag, but we also gotta look at the other probable scenarios too. This may also be setting up for 1-2,1-2. The magnitude of the ensuing rally should give big clues as to the future direction of this stock. If this is a countertrend move it should not last any longer than 7-10 trading days and hold below the last countertrend move.Kauri said:
Cheers.
Overall the target of $15-15.50 in the "Zinc the metal for 2006" thread back in lat Dec 2006 has come out quite well.
michael_selway
Coal & Phosphate, thats it!
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rico01 said:
Also there might be a share buy back?
Look what share buy back did to BHP
thx
MS
tech/a
No Ordinary Duck
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Thought Id throw in a bit of VSA analysis on firstly daily to read in conjunction with the Elliot count---looks to callaborate.
But is seen AT THIS point as an up move in a corrective move.
Clusters of green alerts are powerful indicators.
Shorts are normally closed on the white diamonds as are longs and then taken in the direction of the diamond---Green long---Red short.
Then secondly the Weekly which is showing this also to be an up move in a corrective move.
IN BOTH CASES it is not clear wether this will be a continuation of the up move.But at this point highly likely to be simply a short move up before resuming the downward move.
Thought it would be good to watch.
But is seen AT THIS point as an up move in a corrective move.
Clusters of green alerts are powerful indicators.
Shorts are normally closed on the white diamonds as are longs and then taken in the direction of the diamond---Green long---Red short.
Then secondly the Weekly which is showing this also to be an up move in a corrective move.
IN BOTH CASES it is not clear wether this will be a continuation of the up move.But at this point highly likely to be simply a short move up before resuming the downward move.
Thought it would be good to watch.
Attachments
wayneL
VIVA LA LIBERTAD, CARAJO!
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Tech/a
a/ what is that software?
b/ are they standard deviation bands on the volume chart? (the coloured regions)
a/ what is that software?
b/ are they standard deviation bands on the volume chart? (the coloured regions)
Although Zfx management ought to be able to position it to thrive over time with the money being generated, the zinc price is admittedly still the spur of its volatilty.
The surge in zinc exports from China may have been attributable (according to Merril Lynch) to producers moving to beat some mid-December tax changes that subsequently should have acted to reduce the attractiveness of exporting the metal from China. (They say Jan export figures due on Feb 24th where the accuracy of this assertion may be supported - or not)
Also, the higher price outside China probably spurred exports, but this differential has basically corrected and the fundamental supply tightness in zinc for 07 should re-assert itself.
The surge in zinc exports from China may have been attributable (according to Merril Lynch) to producers moving to beat some mid-December tax changes that subsequently should have acted to reduce the attractiveness of exporting the metal from China. (They say Jan export figures due on Feb 24th where the accuracy of this assertion may be supported - or not)
Also, the higher price outside China probably spurred exports, but this differential has basically corrected and the fundamental supply tightness in zinc for 07 should re-assert itself.
Zinc inventory has only risen 10 - 15k since its low in early Dec. According to international zinc group zinc will be in deficit this year. If so, can view current price as low (or close to low) for this year.
Lead will add to the bottom line.
Lastly what will ZFX do with all that cash once smelting operations are sold? If they announce a special dividend it could spur the price.
Lead will add to the bottom line.
Lastly what will ZFX do with all that cash once smelting operations are sold? If they announce a special dividend it could spur the price.
Kauri
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I guess this won't do them any harm short term, or KZL either????
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Indeed Kauri, cheers for the update here, I saw a similar article around the place today...... Incidentally, I have a mate who worked at Xstrata's Mt Isa mine for a year - he said after a year his blood was so full of lead and he felt so sick, he left as soon as his contract ran out! Apparently, the smelter is just a piece of sh#% that pollutes chronically, but due to legislation in place, the smelter doesn't have to meet the normal pollution standard as long as it stays in commission.......
I agree with you trensta - what will ZFX do with all the cash once the smelters are sold? There are estimates that they may make as much as 3 Billion out of the deal and with the likely profit estimates in the realm of 1.5 Bil, that's more than half there market cap earned in a year's work - just incredible! Whilst the technical picture is bleak at the moment, the numbers this monolith appears to be pumping out are incredible.
Cheers
I agree with you trensta - what will ZFX do with all the cash once the smelters are sold? There are estimates that they may make as much as 3 Billion out of the deal and with the likely profit estimates in the realm of 1.5 Bil, that's more than half there market cap earned in a year's work - just incredible! Whilst the technical picture is bleak at the moment, the numbers this monolith appears to be pumping out are incredible.
Cheers
