LONDON (Alliance News) - ZincOx Resources PLC shares declined on Thursday after it said it has conducted a conditional placing to raise GBP2.1 million and plans to carry out an open offer with existing shareholders to raise a further GBP1.1 million, both at a slightly discounted price.
ZincOx shares were down 3.8% to 12.75 pence per share on Thursday morning.
The Asia-focused company currently operating in South Korea said it placed 16.1 million new shares at 13.0 pence per share. The open offer will be at the same price as the placing. That 13.0 pence price represents a 1.9% discount to the closing mid-market price of 13.25 on Wednesday.
The proceeds from the placing and open offer, which are only conditional on admission, will be used to accelerate upgrades at the Korean recycling plant and to progress work on the company's next recycling plant.
"The placing enables us to debottleneck the plant this year which will dramatically reduce downtime and improve the annual earnings before interest, tax, depreciation and amortisation of the Korean recycling plant," the company said Thursday.
"The additional funds to be raised in the open offer will allow us to press ahead with the pre-development work for the next project and so begin to unlock the full potential of the rotary hearth furnace technology," it added.
On Tuesday, ZincOx had said it has continued to improve its operations at the Korean recycling plant in the first half of 2015. The plant is the company's only producing asset. It treats electric arc furnace dust generated from steel production to recover zinc and some lead.
The company plans to notify shareholders of the open offer shortly, but ZincOx said the terms and procedure will be similar to the open offer undertaken by the company in April 2014.
That open offer in April last year resulted in ZincOx shareholders taking up 20.4 million shares, just over half of the shares available in the 7-for-26 open offer.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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