ZOX Zincox Res.

TIDMZOX

RNS Number : 5723F

ZincOx Resources PLC

28 April 2011

ZincOx Resources plc ("ZincOx" or "the Company")

Korean Recycling Plant Loan and Offtake Contracts Signed

ZincOx Resources plc ("ZincOx" or the "Company") is pleased to announce the completion of an off-take agreement and the formal documentation for loans to be provided by Korea Zinc Co Ltd ("Korea Zinc") for the development of the first phase of the Company's Korean Recycling Plant ("KRP"), scheduled for completion in the first quarter of 2012. This follows the signing of a Letter of Intent previously announced on the 13(th) December 2010.

The Off-take Agreement

The Off-take Agreement covers the entire zinc concentrate production from Phase 1 and lasts for ten years from first production. The concentrate will be sold on the basis of the ordinary international formula for pricing of concentrate between mines and smelters, but includes a fee to cover the cost of removing chlorides and fluorides by washing, in line with ordinary industry practices.

In addition Korea Zinc have agreed to provide two loans, the Off-take Loan and the Development Facility.

Off-take Loan

The Off-take Loan is for US$35 million and will bear interest at 5% per annum over LIBOR. Repayment will commence following the repayment of the Development facility. It will be drawn down in three instalments following the investment of approximately three equal tranches of equity provided by ZincOx.

Development Facility

The Development Facility is for US$15 million and will bear fixed interest at 15% per annum. It will be repaid from KRP's free cash flow, after deduction of interest on the Offtake Loan, or as a bullet repayable at the end of three years.

ZincOx will stand as guarantor for both loans which may be repaid at any time without penalty.

Following final negotiation of the terms of the loans, repayment is to be made more rapidly than foreseen in the Letter of Intent and the Company has already commenced discussions with commercial banks for the provision of financing for Phase 2, once Phase 1 is fully operational.

KRP

The KRP will treat 200,000 tonnes per annum of steel waste dust (EAFD) in Phase 1 and produce approximately 70,000 tonnes of zinc concentrate with a grade of 58 per cent zinc and 95,000 tonnes per annum of an intermediate iron product. Capacity will then double under Phase 2 which will be developed following the commissioning of Phase 1. Phase 2 will involve new financing arrangements, discussions for which have already commenced with international banks and which the Board will seek to put in place once Phase 1 is operational.

Commenting on the announcement, Andrew Woollett, ZincOx's Executive Chairman said "We are delighted to have such strong support from one of the world's largest zinc producers and their commitment reinforces the strength of the technology. Excellent progress is being made at site and the development remains on schedule and within budget"

For further information, please contact:

ZincOx Resources plc Andrew Woollett, Executive Chairman +44 (0) 1276 450100

Nominated Adviser and Broker Ambrian Partners Limited Andrew Craig / Jen Boorer +44 (0) 20 7634 4700

Tavistock Communications

Charlie Geller / Paul Youens

+44 (0) 20 7 920 3150

This information is provided by RNS

The company news service from the London Stock Exchange

END

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