LONDON (Alliance News) - ZincOx Resources PLC saw its shares drop on Tuesday after it said its Korean recycling plant will not return to full production until next year following its suspension to be repaired, leaving the company with lower cash reserves.
ZincOx shares were down 14% to 7.50 pence per share on Tuesday morning.
In October, the Korean plant treated 14,979 tonnes of electric arc furnace dust, a waste generated from the recycling of steel, and produced 3,475 tonnes of zinc in concentrate. The zinc recovery rate reached 91% during the month.
However, at the beginning of November the plant was suspended following the discovery of an area of elevated temperature and after an independent inspection recommended certain repairs on the plant.
The current repairs are set to last two more weeks and once production restarts at the plant, ZincOx expects to return to full production in the first quarter of 2015. The repairs will leave the company with lower cash reserves than it would normally operate with, but ZincOx expects its balance to be restored to a normal level as production increases during November and December, it said in a statement.
"Since recovery was stabilised above 90% in the summer, we have been concentrating our efforts on greater throughput; this has risen dramatically in October, and we expect this progress to continue over the next few months," said Chief Executive Andrew Woollett.
Following the plant returning to full production, ZincOx plans to focus on rolling out the technology from the recycling plant to other Asian countries. New plants will focus on taking advantage of the special characteristics of zinc concentrate and iron for the production of more valuable industrial products to enhance economic returns, said ZincOx in a statement.
The company are actively seeking a long-term capital provider to fund the construction of new recycling plants through debt and equity, alongside strategic partners to fund future rollouts of the technology.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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