Zincox Resources Plc Regulatory News (ZOX)

ZincOx Resources plc

("ZincOx" or the "Company")

£6.25 million Raised in Conditional Placing

ZincOx Resources plc (AIM: ZOX) which specialises in the low cost recovery of high grade zinc compounds from unconventional sources, is pleased to announce a conditional placing (the "Placing") of 11.16 million new Ordinary Shares at a price of 56 pence per share to raise £6.25 million before expenses.

Highlights

·; £6.25 million raised in conditional placing at a price of 56 pence per share;

·; The Placing has been undertaken jointly by Peel Hunt and finnCap on behalf of the Company;

·; The Placing proceeds will be used to fund the initial development costs of the second phase of its waste recovery plant in South Korea and the advancement of a roll out of the technology to the USA, Turkey and Thailand as well as the ongoing working capital needs of the business; and

·; The Placing is conditional, inter alia, on a resolution being passed at a general meeting of the Company to disapply pre-emption rights in connection with the allotment of the Placing Shares.

Andrew Woollett, Executive Chairman of ZincOx, said:

"I am delighted to announce this placing which will provide the cornerstone for the Company's full development of the Korean Recycling Plant ("KRP") and help to accelerate the roll-out of similar plants elsewhere in the world. It is particularly pleasing that investors are willing to provide funds in such difficult markets and I am pleased to welcome new institutional shareholders.

"Ahead of first revenues from the KRP, the funds raised will allow us to build on our efforts in the USA, Turkey and Thailand where considerable work has already been undertaken."

For further information please contact:

1. Details of the Placing

On behalf of the Company, Peel Hunt LLP ("Peel Hunt") and finnCap Limited ("finnCap") have jointly raised approximately £6.25 million (before expenses) by the proposed issue of 11,160,715 Ordinary Shares (the "Placing Shares") at a price of 56 pence per share. The Placing Price represents a discount of approximately 4.1 per cent. to the volume weighted average share price of 58.42 pence per Ordinary Share on 10 November 2011. The 11,160,715 Placing Shares will represent approximately 14.33 per cent. of the issued share capital of the Company prior to the issue of the Placing Shares.

Application has been made for the Placing Shares, which will rank pari passu in all respects with the existing Ordinary Shares, to be admitted to trading on the AIM Market of the London Stock Exchange ("Admission"). It is expected that dealings in the Placing Shares will commence on 5 December 2011. Following the issue of the Placing Shares, there will be a total of 89,021,335 Ordinary Shares in issue.

The Placing is conditional upon, inter alia, approval by shareholders of the Company ("Shareholders"). It is expected that a circular will be posted to Shareholders on 15 November 2011 setting out the details of the Placing and convening a general meeting ("General Meeting") to approve a resolution ("Resolution") to disapply pre-emption rights.

The Placing Shares are not being offered to Shareholders on a pre-emptive basis because the Board has concluded, having taken appropriate advice, that it is not in the best interests of the Company to make such a pre-emptive offer due to the time and cost involved. The making of a pre-emptive offer would require the production of a prospectus which would have to comply with the Prospectus Rules and be pre-vetted and approved by the UK Listing Authority.

2. Use of Proceeds

The Company wishes to press ahead with the development of KRP2, the second phase of the KRP, as quickly as possible, which could be as soon as Q3 2012. As it is intended that much of the financing for KRP2 is to be provided by bank debt, the Company wants to have presented to potential lenders a detailed plan for the development before the middle of 2012. In order to meet this development schedule, considerable engineering and other work will need to be carried out over the coming months. The funds being raised under this Placing will enable this work to be carried out.

The Company believes it enjoys a strong "first mover advantage" in respect of the treatment of EAFD in the rotary hearth furnace and also believes that once it has demonstrated the technology at phase 1 of the KRP ("KRP1"), this advantage could begin to be eroded. Accordingly, the Company will need to reinvigorate its effort in other regions where considerable work has already been undertaken. The Placing will enable this work to proceed and supplement working capital.

3. Current Trading and Prospects

The main business of the Company is the development of its first waste dust recycling plant, in South Korea. The development is being undertaken in two phases, KRP1 and the expansion KRP2.

The budget for the development of KRP1 is US$110 million. Of this total amount, US$8 million is for working capital and other capitalized pre-operating expenses, so that the actual construction cost is US$102 million. To date, about 94 per cent of the construction cost has been spent or is contractually committed. The balance of the construction cost has been reviewed in detail and, provided the exchange rates between the Korean Won, the US dollar and sterling remain broadly as they are today, the project is expected to be completed slightly under budget.

Commissioning activity has recently commenced at KRP1 as per the announcement released via the RIS on 8 November 2011. Initially, this commissioning involves the testing of the mechanical equipment and is an essential activity ahead of production. It has proceeded in line with the previously announced schedule in which KRP1 commences production in Q1 2012, with a ramp up taking place over the following six months. The project, therefore, remains on schedule.

4. Placing Agreement

Within the terms of the placing agreement entered into between Peel Hunt, finnCap and the Company, Peel Hunt and finnCap have conditionally placed the Placing Shares with investors at a price of 56 pence per share. It is anticipated that dealings in the Placing Shares will commence at 8:00 a.m. on 5 December 2011. The Placing is conditional, inter alia, upon the passing of the Resolution and Admission becoming effective and the Placing Agreement becoming unconditional in all respects by no later than 8:00 a.m. on 2 December 2011 or such later date (being not later than 8:00 a.m. on 15 December 2011) as the Company, Peel Hunt and finnCap may agree.

5. General meeting

A General Meeting of the Company will be held at the offices of Eversheds LLP at One Wood Street, London, EC2V 7WS, at 3p.m. on 2 December 2011, to consider and, if thought appropriate, pass the Resolution as a special resolution to disapply pre-emption rights in connection with the allotment of the Placing Shares.

6. Timetable

Each of the times and dates in the table below is indicative only and may be subject to change.