Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: Mac who wrote (934)	1/18/2006 10:33:37 AM
From: Stephen O	Respond to of 3270

Zinifex Shares Fall as Mining Plan to Cut Earnings 2006-01-17 21:07 (New York) By Tan Hwee Ann Jan. 18 (Bloomberg) -- Shares of Zinifex Ltd. had a record decline after the world's second-largest zinc producer said a new mining plan will increase costs and cut earnings. The plan will reduce earnings before interest and tax by A$35 million ($26.3 million) a year, the Melbourne-based company said in a statement today. It will need to spend A$280 million ($211 million) in cash over three years to bring forward the removal of waste at the Century mine in Queensland state. Zinifex's shares reached a record yesterday as zinc prices surged 79 percent in the last six months because global demand is outpacing supply. Miners worldwide are struggling to contain costs as energy and steel prices surge because of competition to expand capacity to meet rising raw material demand from China. ``The stock had had a good run recently, and this will trigger profit taking,'' Mark Pervan, head of research at Daiwa Securities SMBC, said by phone. ``The mine plan change though is a company specific issue.'' The shares fell as much as A$1, or 12 percent, to A$7.22, on the Australian Sock Exchange and traded at A$7.35 at 1:05 p.m. Sydney time. That's the steepest intra-day decline for the company. Zinc production of 500,000 tons a year at the mine, the world's second largest zinc mine, is expected to be unaffected by the change in plans, said Martin McFarlane, a spokesman for the company. Equipment It will need to spend A$120 million for fiscal 2007, and the remaining cash over 2008 and 2009 for the waste stripping. Money will be spent on buying equipment such as shovels and trucks, the company said in its statement posted on the exchange. ``Costs in the mining industry has increased over the last few years, so the costs of removing the waste material has increased,'' McFarlane said over the phone. ``That will flow into profit impact due to higher amortization.'' Bendigo Mining Ltd., which is developing a gold mine in southeastern Australia, today also said it expects capital costs for its processing plant to be between A$2 million and A$4 million higher than its initial A$53 million estimate. The revision is mainly due to higher labor costs, it said. --Editor: Gosman