New Century Resources’ Shares Tumbled After Releasing Its Investor Presentation

New Century Resources Limited (ASX:NCZ) released its Investor Presentation on 30 October 2018 following which the share price of the company decreased by 2.339 percent. As per the investor presentation, the company is focusing on becoming a globally significant zinc producer. The company is having strong zinc market fundamentals despite weak equities performance in zinc producers. The company is also having a strong demand for Zinc consumption. Zinc consumption is dominated by China and it is forecasted that China will continue to be a strong importer of zinc concentrates. The global demand for zinc is forecasted to grow by 2 percent annually.

As per the Century Feasibility Study, Century is having a design capacity of 264,000tpa of zinc in 507,000tpa of concentrate (52% zinc) and it is also having Ore reserves of 2.3Mt zinc & 29.7Moz silver. The Century Feasibility Study has concluded highly attractive economics with NPV at A$1.3Bn & IRR at 270% at long-term zinc price of US$1.25/lb.Â

The company recently completed the zinc concentrate loading at Karumba Port onto the MV Wunma which is an incredible milestone for the company as the company is able to start shipping concentrate just after 15 months of listing. The first shipment from Century represents 10,000t of the company’s commissioning grade concentrate, which is to be delivered to contractual specification and contains no penalties for lead or carbon and only an immaterial penalty for silica. Lead content within zinc concentrates typically has little effect on the overall saleability of the product in comparison to other impurities such as manganese, iron, cadmium or silica. While the Company continues to progress toward achieving long-term production of its steady state concentrate through the load commissioning process, it has received a strong market demand for its current commissioning grade concentrate. It’s the first time that the NCZ’s Century Mine is utilizing the Karumba Port facility for storing zinc production since 2016. Through a slurry pipeline that connects the mine and Karumba port, the zinc concentrate is reaching the facility. The company is transferring them in semi-liquid form through a 304 km underground slurry pipeline for shipping to smelters across Europe, Australia, and Asia.

In FY 2018, the company reported the loss of $123.31m which was $3.78m in FY17. The basic and diluted loss per share increased from 2.02 cents in FY 2017 to 32.32 cents in FY 2018. The total current assets of the company increased from $5.73m in FY2017 to $67.71m in FY18 and the cash flow used in operating activities increased from $1.56m in FY17 to $20.52m in FY18.

In the past six months, the share price of the company decreased by 26.92 percent as on 29 October 2018. NCZ’s shares traded at $0.835 with a market capitalization of circa $430.9 million as on 30 October 2018 (AEST 4:00 PM).

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