ZFX - Zinifex Limited

[uhu]

Well,

Do you have informations about why the Nyrstar project is better than a simple merger between ZFX and Umicore?
Papers say ZFX would like to concentrate to mining after giving smelting business to Nyrstar.

????

Nyrstar is owned by ZFX and the CEO of Nyrstar will be one of the ZFX bosses...so I dont understand the above logic.

 

[vishalt]

no.

Umicore & Zinifex both own Nyrstar, the board of Nyrstar comprises of a board of directors - equally from both Umicore and Zinifex.

Zinifex is going fine in the short-term.. it needs to find some mines quick as the current ones wont last long, or a merger between Oxiana and Zinifex is the way to go.

 

[uhu]

Hi Vishalt,

Yes, I see you and I agree with you.
My question was (would have been):

Why do Unicore and ZFX need a new company (nyrstar) to cooperate?

thanks

 

[vishalt]

I believe its basically a way to raise money lol, transfer the smelting business to Nyrstar (with Umicore) and retain yourself as a pure Zinc play.

 

[Nicks]

All I know is that at this price and with a 70c div coming up, its a bargain imo. Demand will continue from Chindia, it is making bucketloads on its own, or it is going to get taken over. Either way I grabbed some more.

 

[bergers_n_fries]

hello everyone...ive recently discovered this forum and i must say i am very impressed by it all and the knowledge conveyed.

with that said i have a few grand to throw around a bit and i was wondering if zfx was the way to go??

considering its high dividend value in comparison to its share price would that mean anything positive???

forgive me if i am a little off the mark as i have only recently solidly followed the markets due to me doing the normal young student thing of spending all my money on clothes and going out...

cheers in advance and i look forward to your opinions

dan

 

[vishalt]

ZFX is a high-risk stock though.

It makes a lot of money right now, and is attractive for a takeover - BUT, thats all speculation, realistically its mines have very low lives (5-15 years I think, Roseberry is not far from expiry), as opposed to BHP/RIO which have heaps of mines that have lifespans of a century. They also have a massive cash sheet to make acquisitions/ventures.

Personally if I was just starting to invest I'd go with any of the bank stocks, or with BHP/Rio.

 

[bergers_n_fries]

what i meant to include was that i already have bhp, wdc and amp (the last two since i was alot younger and bhp as of last week)

zfx will act as my speculative/riskier share...

have they found anymore sustainable mines???

as i understand the smelting operation with another miner would create increased revenue???

and why is the dividend much higher than most considering the price of the share at this present time???

cheers

 

[Nicks]

ZFX is a high-risk stock though.

It makes a lot of money right now, and is attractive for a takeover - BUT, thats all speculation, realistically its mines have very low lives (5-15 years I think, Roseberry is not far from expiry), as opposed to BHP/RIO which have heaps of mines that have lifespans of a century. They also have a massive cash sheet to make acquisitions/ventures.

Personally if I was just starting to invest I'd go with any of the bank stocks, or with BHP/Rio.

Yes but 5-15 yrs @ 1.40+ pa dividend pays for its capital outlay. Add to that prospective capital gains from an astute management through utilising the companies experience to explore, open, buy new mines and any prospective aquisitions and deals then you have a Fantastic Stock with Fantastic Opporunity.

Burger Man - given your exisiting portfolio of solid stocks I think you are on the mark and this would make an excellent aquisition for your portfolio. Get in quick before the SP jumps back up to high teens in anticipation of the coming 70c dividend - and you'll get both (the 70c dividend and the SP appreciation).

Good luck and don't eat too many fries wth your whopper.

 

[adobee]

I think Nicks has hit the nail on the head here.. not much else that can be said.. .

 

[michael_selway]

Yes but 5-15 yrs @ 1.40+ pa dividend pays for its capital outlay. Add to that prospective capital gains from an astute management through utilising the companies experience to explore, open, buy new mines and any prospective aquisitions and deals then you have a Fantastic Stock with Fantastic Opporunity.

Burger Man - given your exisiting portfolio of solid stocks I think you are on the mark and this would make an excellent aquisition for your portfolio. Get in quick before the SP jumps back up to high teens in anticipation of the coming 70c dividend - and you'll get both (the 70c dividend and the SP appreciation).

Good luck and don't eat too many fries wth your whopper.

Hi Nicks, what makes you think its $1.40pa dividend for the next 15 years?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 274.1 233.0 174.2 116.1
DPS 140.0 125.0 86.0 60.0

EPS(c) PE Growth
Year Ending 30-06-08 233.0 6.7 -15.0%
Year Ending 30-06-09 174.2 9.0 -25.2%

Thanks

MS

 

[rederob]

Hi Nicks, what makes you think its $1.40pa dividend for the next 15 years?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 274.1 233.0 174.2 116.1
DPS 140.0 125.0 86.0 60.0

EPS(c) PE Growth
Year Ending 30-06-08 233.0 6.7 -15.0%
Year Ending 30-06-09 174.2 9.0 -25.2%

Thanks

MS

MS
I admit to being wearied by your regurgitation of Comsec forecast earnings.
These forecasts have been regularly wrong by several hundred percent in recent years for various minerals producers.
Do you have some original thoughts?
Just remember that zinc warehouse levels are at about 10% of their levels from around 5 years ago.
Also note that the present inventory trend remains relatively flat, despite zinc prices dipping sharply in recent months.
Zinc is quite unspectacular now, and may remain so.
However, it is much too soon to discount further upside - and not simply a dead cat bounce!

 

[GREENS]

MS
I admit to being wearied by your regurgitation of Comsec forecast earnings.
These forecasts have been regularly wrong by several hundred percent in recent years for various minerals producers.
Do you have some original thoughts?
Just remember that zinc warehouse levels are at about 10% of their levels from around 5 years ago.
Also note that the present inventory trend remains relatively flat, despite zinc prices dipping sharply in recent months.
Zinc is quite unspectacular now, and may remain so.
However, it is much too soon to discount further upside - and not simply a dead cat bounce!

Red I would be quite interested to hear your thoughts on Zinc at the moment (both ST and LT), cancelled warrants aren’t looking to healthy, metal inflows are becoming more frequent and in larger quantities and China is a net Exporter. ST not looking so good, but what has me dumfound is that inventories had slowly declined over the past 3-4 months (are still near their lowest levels), and Zn price has not reacted, yet as soon as we saw some metal inflow into the markets, the markets reacted very efficiently to the news, any thoughts on why this might be the case?

In regards to Zinc stocks, I can now see why you favoured KZL as your zinc exposure, after doing some major research on all the zinc miners over the past 6 months.

Cheers Greens

 

[Nicks]

MS, agree with Red, looks like a cut and paste out of Etrade. I must admit my 140c pa was just an expectation of the returns it is currently giving, but I actually will be expecting an INCREASE (ie more than 140c pa), as no doubt the market is, hence the SHARE PRICE reflecting expectation of future income streams, eps and dps.

Those figures you cut and paste assumes status quo. Check out what ZFX is doing and I think you will agree that it wont remain status quo.

 

[michael_selway]

MS, agree with Red, looks like a cut and paste out of Etrade. I must admit my 140c pa was just an expectation of the returns it is currently giving, but I actually will be expecting an INCREASE (ie more than 140c pa), as no doubt the market is, hence the SHARE PRICE reflecting expectation of future income streams, eps and dps.

Those figures you cut and paste assumes status quo. Check out what ZFX is doing and I think you will agree that it wont remain status quo.

If Zinc Price increase, then yes EPS & DPS, will increase

So you think Zinc price wont decrease over the next few years i guess?

Thanks

MS

 

[rederob]

Red I would be quite interested to hear your thoughts on Zinc at the moment (both ST and LT), cancelled warrants aren’t looking to healthy, metal inflows are becoming more frequent and in larger quantities and China is a net Exporter. ST not looking so good, but what has me dumfound is that inventories had slowly declined over the past 3-4 months (are still near their lowest levels), and Zn price has not reacted, yet as soon as we saw some metal inflow into the markets, the markets reacted very efficiently to the news, any thoughts on why this might be the case?

In regards to Zinc stocks, I can now see why you favoured KZL as your zinc exposure, after doing some major research on all the zinc miners over the past 6 months.

Cheers Greens

GREENS
Zinc has lost its market darling status.
China is churning out more zinc than many expected, sooner than expected.
However, it begs the question of warehouse inventories at SHFE and LME being relatively static for a good while now.
Clearly if iron ore is being consumed by China at ever increasing quantities then a proportion of extra zinc will be needed over and above present demand.
But if we see supply more than compensating then it might be game over.
Right now I reckon it's a waiting game.
The technicals for zinc are poor, and the fundamentals do not look flash.
But they said that of copper last year, too.
And who was right?

by the way, KZL will do well because it's knocking out more and more copper

 

[bigdog]

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=01D63DF8-17A4-1130-F542535936BCB82E

Zinifex A Dividend Stripping Candidate
FN Arena News - September 14 2007

By Chris Shaw

Dividend stripping has been a popular strategy among income seeking investors for some time but until recently it was primarily confined to the major banks given the above market yields they offered.

But with the ongoing surge in commodity prices companies in the mining sector are now coming to the party and using their significant cash flows to deliver solid dividends to shareholders, a prime example being zinc miner Zinifex (ZFX).

The warrants team at ABN Amro sees scope for the stock to be an attractive dividend play leading into the stock going ex-dividend a fully franked 70c on October 30, a payout that represents a yield of 4.4% on this one dividend alone.

The broker points out there are currently 47 days until the ex-date, meaning the 45-day holding rule for taking advantage of franking credits is satisfied and with the stock having recently pulled back from highs of around $21.00 the shares appear reasonable value.

A look at the long-term chart of the stock supports the broker’s view the play has potential as the shares remain in a long-term uptrend and it has done well as a dividend play on both of its last two payouts. The stock is also trading below the broker’s valuation of $16.49, which is around 15% below its target price of $18.50.

 

[GREENS]

GREENS
Zinc has lost its market darling status.
China is churning out more zinc than many expected, sooner than expected.
However, it begs the question of warehouse inventories at SHFE and LME being relatively static for a good while now.
Clearly if iron ore is being consumed by China at ever increasing quantities then a proportion of extra zinc will be needed over and above present demand.
But if we see supply more than compensating then it might be game over.
Right now I reckon it's a waiting game.
The technicals for zinc are poor, and the fundamentals do not look flash.
But they said that of copper last year, too.
And who was right?

by the way, KZL will do well because it's knocking out more and more copper

Cheers Red your thoughts are much appreciated and informative, as always. Cancelled warrants looking a little healthier the past two days now above the 12,000t mark, but nothing to get too excited about just quite yet.

Exactly, KZL full year production should around 20-25kt of Cu, which will be very handy for the bottom line, but just as importantly I was referring to their low cash cost/lb of Zn. There margins are quite healthy compared to their peers, and the company seems to be very well managed. In addition they have exposure to fairly substantial Gold (Red Dome) and nickel reserves which could become handy in furutre years.

 

[Fab]

ZFX looks like a good buy at the moment at current price. I am looking at leveraging into it in the short term. I am wondering how it looks technically, my technical analysis is not that great. Also what is the potential impact on its share price of a drop in rate or a housing slowdown in the US.

As per mentioned above the current share price is below abn recommended price and it can be a good dividend strip

 

[Nyden]

Do Zinifex have a DRP? If so, do they offer any discount off of market price?

Darn, not 100 words