LONDON (Alliance News) - Shares in ZincOx Resources PLC plummeted early Wednesday after the cash shell revealed it has one month to complete a reverse takeover to prevent its shares being suspended and that its loss in the first half swelled significantly.
ZincOx shares were down 29% to 0.353 pence per share, giving it a market capitalisation of only GBP939,968. Shares are trading 54% lower than the start of the year.
ZincOx has been classed as a cash shell under AIM rules following the company's decision to lower its interest in its principal asset, a metal recycling plant in South Korea, meaning it has to conduct a reverse takeover before the end of October to avoid shares being suspended from AIM.
If suspended, ZincOx would have six months to get them reinstated before they are cancelled permanently from trading.
In further bad news, ZincOx reported a pretax loss for the first six months of 2016 amounting to USD5.2 million compared to the loss of USD2.2 million a year earlier. That loss was despite a rise in revenue to USD604,000 from USD292,000 and a turn to a gross profit of USD91,000 from a USD33,000 loss.
Impairments went to USD3.9 million from none, the primary driver for the wider loss in the period.
ZincOx said it is primarily looking for opportunities where it can bring its considerable zinc experience to bear and where this can add value without the immediate requirement for additional investment.
"In view of the company's very depressed share price, management believes an attractive new project may best be financed through a joint venture with an industry partner or using private equity at the project level rather than an equity issue at corporate level," said the company.
Despite the threat of suspension next month, ZincOx said it expects to secure a flagship project "before the year end".
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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