Zincox Resources Plc Regulatory News (ZOX)

3 Feb 2005 14:45

ZincOx Resources PLC03 February 2005 3 February 2005 ZincOx Resources plc placing raises £4.37million ZincOx Resource plc ("ZincOx" or the "Company")(Symbol ZOX) has raised £4.37million net of expenses in a conditional placing (the "Placing") withInstitutions arranged by Numis Securities Limited ("Numis"). The Placinginvolved the issue of 4,678,764 new ordinary shares in the Company at a price of£1.00 per share. Immediately following the Placing the total number of shares inissue will be 28,306,536. The proceeds from the Placing will be used to purchaseland for the Aliaga zinc recycling plant, in Turkey, to complete the feasibilitystudies referred to below, to develop the Polykiln technology and to pursuefurther recycling projects. Commenting on the announcement, Andrew Woollett, ZincOx's managing director,said "This Placing will allow us to press ahead with the development of theTurkish project without delay and at the same time pursue new recycling projectselsewhere in the world. We have used the Placing to bring in a number of newinstitutional shareholders which greatly strengthens our future capital raisingcapacity". ZincOx specialises in the recovery of zinc from non-sulphur bearing materials.The Company is currently carrying out feasibility studies on projects to recoverzinc from steel recycling waste in Turkey and the USA and on the Jabali zincdeposit in Yemen. In addition, new zinc recovery equipment, the Polykiln, isbeing piloted using lead smelter waste slag. The Company has recently entered into a land purchase option agreement by whichit can purchase, at a cost of TRY3.95 million (£1.58million) an area covering25..4 hectares in the Aliaga Heavy Industrial Zone, in Turkey. This land will besufficient for the construction of the Aliaga zinc recycling plant and a longterm residue disposal facility. The area is within four kilometres of five steelrecycling plants that together should produce sufficient waste dust to meet therequirements for the first phase of project development. ZincOx is earning a 60% interest in the Jabali project in Yemen by thecompletion of a feasibility study. The Jabali deposit contains a mineablereserve of 9.0 million tonnes of ore containing 9.5% zinc and 67g/t silver, ofwhich 89.1% is in the measured and indicated category. The feasibility study,which is investigating the treatment of 800,000 tpa ore for the recovery of70,000 tpa of zinc oxide using the LTC process, is scheduled for completion inthe second quarter of this year. The development of the project is likely to befinanced largely by a project finance debt facility which will be arrangedfollowing the completion of the feasibility study. Financing is expected to takesix months to complete. Construction and commissioning of the project isexpected to take a further 24 months. The development cost of the Jabali project is expected to be approximately£40million. At a zinc price of US$1,000/t zinc (current price US$1,278/t) and adiscount rate of 10%, internal projections indicate the project has a netpresent value of approximately £34million, ZincOx's share of which would be 60%or approximately £20million. In Kazakhstan, the Polykiln equipment has been tested by piloting since August,2004. A programme to confirm the reagent and energy consumption of the equipmentis expected to commence shortly. This test will allow the operating costs forthe recovery of zinc concentrate from lead smelter slag to be estimated andthese should be reported in the second quarter of this year. Following completion of the sale of the Shaimerden deposit in Kazakhstan, lastyear, for US$7.5 million, ZincOx is entitled to receive, subject to the zincprice being above US$800/t, further deferred receipts relating to the first200,000 tonnes of zinc mined. These payments will be at a rate equivalent toUS$0.2375 per tonne for every dollar that the LME zinc price is above US$800. Attoday's zinc price the further deferred receipts would amount to approximatelyUS$22.7million. Providing the zinc price remains above US$800 any furtherdeferred receipts are anticipated to be received between 2007 and 2010. Under the Placing, the Company has conditionally placed 4,678,764 new ordinaryshares of 25p each (the "New Shares") at a placing price of £1.00 per share witha number of institutions to raise £4,678,764 (before expenses) (£4,370,000 afterexpenses). The Placing has been arranged by Numis who have also underwritten theissue. The Placing is subject to a Placing Agreement between ZincOx and Numisbecoming unconditional and not being terminated prior to 9 February 2005 theexpected date of Admission or such later date (being no later than 23 February2005) which the Company and Numis may agree. The New Shares will rank pari passuin all respects with the existing ZincOx Shares in issue. It is expected thatdealings in the New Shares will commence on AiM on 9 February 2005. For more information please contact: Andrew Woollett Leesa Peters / Laurence ReadZincOx Resources plc Conduit PRTel: +44 (0) 1276 455 700 Tel: +44 (0) 20 7936 9095/ +44 (0) 781 215 9885awoollett@zincox.com leesa@conduitpr.com This information is provided by RNS The company news service from the London Stock Exchange