Zincox Resources Plc Regulatory News (ZOX)

17 March 2014

ZincOx Resources plc

("ZincOx" or the "Company")

Korean Production Update

ZincOx Resources Plc, (AIM:ZOX) is pleased to report good progress at its wholly owned Korean Recycling Plant (KRP). The KRP is one of the largest Electric Arc Furnace Dust recycling facilities in the world and uses a new process to recover a high quality zinc oxide concentrate and an iron bearing intermediate scrap substitute.

Highlights

· Record production in January 2014;

· Continuing increase in KRP's monthly production;

· Replacement of the inner shell of the second heat exchanger ahead of schedule;

· Further replacement of inner shells in remaining two heat exchangers, originally planned for August 2014, to be made in April to improve plant performance ahead of schedule.

January 2014 was a record month, with 3,131 tonnes of zinc in concentrate being produced, which generated a positive EBITDA1 at KRP of over US$200,000. Production during the month was, however, constrained by a lack of oxygen contracted from the external supplier. The supplier has since increased the capacity of the supply by the addition of a new evaporator which is now in operation. In March, as a result of the increased availability of oxygen, production continues to increase and at current run rates it is expected to be significantly higher than in January. In the first sixteen days of March 1,750 tonnes of zinc in concentrate was produced.

During February, the gas handling system suffered a slight leakage in one of the heat exchangers which was scheduled to have its inner shell replaced during a period of planned maintenance in March. In view of the reduction of efficiency experienced by this unit, it was decided to bring forward the replacement of its inner shell by one month and this was completed successfully in February. At the same time the closure enabled repair work to be undertaken on the rotary hearth furnace which involved the renewal of the refractory in the complex area between the feeder and discharge screw. These repairs stretched over several days so that production for the month amounted to only 1,053 tonnes of zinc in concentrate. However, as a consequence of these works, March should be a full month with no special downtime planned or expected.

In 2013, production was limited by several periods of closure which were the result of repairs required to address corrosion of the inner shells of the heat exchangers. There are four heat exchanger units, two of which have now had the inner shells replaced. Replacement of the inner shells of the other two heat exchangers, which was scheduled for August 2014, has now been brought forward to April to improve the reliability of the plant. The inner shells will be replaced using specially manufactured stainless steel ordered from Europe at the end of 2013 and which is due to arrive in Korea in the coming week. Following these replacements the heat exchangers should not require further attention and production should proceed without interruption until August/September when there is a planned inspection and maintenance stoppage in line with the overall availability plan for the plant.

Commenting on the announcement, Andrew Woollett, ZincOx's Chairman said,

"We are pleased to see the recent increases in production and the improving reliability of the operation. The ramp-up is very much on track with numerous operational improvements, some ahead of the original schedule. We are confident of making considerable further progress over the coming months as we ramp-up to full production"

EBITDA1 means Earnings Before Interest, Tax, Depreciation, Amortization

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