ZincOx Resources PLC Plant Update and Appointment of HCF International (5629C)
January 20 2015 - 2:00AM
UK Regulatory
TIDMZOX
RNS Number : 5629C
ZincOx Resources PLC
20 January 2015
20 January 2015
ZincOx Resources plc
("ZincOx" or the "Company")
Korean Recycling Plant Update and Appointment of HCF
International Advisers Ltd
ZincOx is pleased to announce considerable progress with the
ramp up of its wholly owned Korean Recycling Plant (KRP) and with
the pursuit of new projects.
KRP
Since the plant restarted it has been operating consistently
above target. The feed rate is now at approximately 97% of target
while maintaining zinc recovery at about 90%, which is 95% of the
target. Taken together, this equates to an underlying performance
of about 90% of target. As a result 15,200 tonnes of EAFD was
processed over the past 30 days, a record for such a period.
The underlying performance of the plant is continuing to
improve. As previously reported, during November there was a
closure to repair the refractory at and near the offtake of the
furnace and to replace the refractory of the drop boxes. As a
result electric arc furnace dust (EAFD) throughput amounted to
6,017 tonnes for November resulting in the sale of 1,840 tonnes of
zinc-in-concentrate.
In December, another small refractory failure led to feed
suspension. The cause was quickly identified and the damage has
been fully repaired. EAFD throughput amounted to 10,405 tonnes for
December resulting in the sale of 2,337 tonnes of
zinc-in-concentrate.
Notwithstanding the lower than expected throughput for December,
the KRP generated a positive EBITDA(1) of over US$185,000.
Performance in 2014
Revenue for 2014 was over US$37 million (2013: US$27.1million);
zinc-in-concentrate produced was 28,564 tonnes (2013: 24,577
tonnes) and EAFD processed was 119,124 tonnes (2013: 103,420
tonnes)
New Projects
KRP is now demonstrating a level of performance in terms of
operating costs and process efficiency that enables the Company to
consider the development of the next plant. It is planned that this
plant will involve a Rotary Hearth Furnace (RHF) as at KRP but will
incorporate upgrading facilities for both the zinc concentrate
(CML) and iron briquettes (SAF melter) by which these intermediate
products will be transformed into zinc oxide of an industrial
chemical grade and pig iron. These upgraded products would more
than double the revenue generated per tonne of EAFD. The RHF
together with upgrading equipment is known as the "Full Cycle"
approach.
Preliminary cashflow analysis for a Full Cycle plant treating
100,000 tonnes of EAFD per annum indicates a pre-finance internal
rate of return of approximately 25%. The capital cost for such a
project is expected to be in the range US$105-120 million. Further
details of the Full Cycle concept are given in the latest Company
presentation on the website www.zincox.com Piloting of the CML and
SAF processes will be carried out before a development decision is
taken. The SAF piloting would enable its installation at KRP to be
evaluated.
ZincOx is, therefore, actively seeking a strategic investor for
the development of the next project. To assist in this, the Company
has recently appointed HCF International Advisers Ltd (HCF). Dr Rod
Beddows, ZincOx Chairman, is a director of HCF.
HCF is a leading independent corporate finance advisory boutique
based in London and focused on the global Metals and Mining sector
and associated infrastructure. www.hcfintl.com
Commenting on progress reported today, Andrew Woollett, ZincOx's
Chief Executive said "While we were naturally disappointed by the
small refractory failure in December, since the restart we have
made very good progress with internal combustion in the furnace,
having reduced gas consumption and increased the temperature and
feed rate with improved plant availability. At the current
production rate we are confident of the attractiveness of a new
project and so we can begin to look for a suitable partner. In that
regards, we look forward to working with HCF in identifying a
strategic partner"
(1) Earnings before interest, tax, depreciation and amortization
(adjusted to exclude foreign exchange gains and losses)
For further information please contact:
ZincOx Resources plc Tel: +44 (0) 127 645 0100
Andrew Woollett, Chief Executive Officer
Peel Hunt LLP (Nominated Adviser and Joint Tel: +44 (0) 207 418 8900
Broker)
Daniel Harris
Euan Brown
finnCap Limited (Joint Broker) Tel: +44 (0) 207 220 0500
Matthew Robinson
Joanna Weaving
Tavistock Communications (Financial PR) Tel: +44 (0) 207 920 3150
Simon Hudson
Nuala Gallagher
This information is provided by RNS
The company news service from the London Stock Exchange
END
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