Zinifex (ZFX) Share Trading Recommendation

Submitted by Craig Strzelecki on 31 January, 2007 - 21:40

Zinifex (ZFX) have maintained their share trading recommendation with a Buy and have a new share target price of $21 from analyst Citigroup Investment Research (CIR). The analyst says: "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. Interim estimate trimmed 5 percent to A$745m on inventory build and production issues at Clarksville. Lower NPAT and working capital build has reduced our dividend by 30 cents to 90 cent per share. FY07 estimate also downgraded 3 percent to A$1.75b due to the ongoing roaster issues at Clarksville. Although concerned by the sudden spike in Chinese zinc exports, CIR 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.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. In addition to the favoured zinc leverage, attractive yield and continued positive news flow on exploration, CIR expect the spin-off of the smelter assets with Umicore to un-lock further value in Zinifex through 2007."

Zinifex Limited is listed on the Australian Stock Exchange (ASX) under stock code ZFX. You can view their investor website here. ZFX was listed on the ASX on 5 April, 2004。 Peter Mansell is the Chairman for Zinifex and Peter Mansell the CEO. Zinifex is one of the world’s largest integrated zinc and lead companies. They have their headquarters in Melbourne, Australia and own and operate two mines and four smelters. The mines and two of the smelters are located in Australia and supply the growing industrial markets of the Asian-Pacific region, including China. They also have a zinc smelter in the Netherlands and the United States. They sell a range of zinc metal, lead metal and associated alloys in 20 countries. Zinifex owns and operates two mines in Australia and four smelters: two in Australia, one in the United States and the other in the Netherlands. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade ZFX. Check your charts and good luck with your share trading!

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