Zinifex (ZFX) Share Trading Recommendation

Submitted by Craig Strzelecki on 21 February, 2007 - 05:42

Zinifex (ZFX) have a Buy share trading recommendation and a price target of $20 per share from analyst UBS. Their rating is driven by a combination of CIR’s positive zinc price outlook for 2H07 of US$2/lb as China returns to a net importer and the market remains in deficit. Other positive catalysts are the smelter spin-off and Rosebery and Century life extension from continued exploration upside. Zinifex has entered into a non-binding proposal to acquire Canadian listed Wolfden Resources for about C$360m, or about A$390m. This is a positive move as the high-grade, advanced copper/zinc exploration projects could address the short mine-life issue that will be the major structural challenge facing Zinifex after the smelter spin-off. Wolfden has a number of advanced projects in the Nunavut Territory, Canada. Key projects are the high grade, copper/zinc Izok and High Lake deposits that could be in production from 2014+. Other projects are the de-commissioned Lupin gold mine, which could be restarted due to the higher gold price and is likely to form the base for the Izok processing. With pre-smelter spin-off free cash flow of A$1.4b in FY07 and A$1.6b in FY08 estimated, funding the acquisition and subsequent increase in exploration and capex is not a constraint. However, a successful acquisition would create risk to CIR’s dividend estimates that are based on continued excess cash return to shareholders through a fully franked dividend.

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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