Zincox Resources Plc Regulatory News (ZOX)

15 August 2012

ZincOx Resources plc

("ZincOx" or the "Company")

Korean Recycling Plant Production Update

Metallurgical Targets Achieved

ZincOx is pleased to announce that the first phase of development of the Korean Recycling Plant (KRP1) is currently operating with zinc recovery and iron metallization at or very close to target levels. Capacity utilization has been steadily improving as teething problems have been addressed and, with the exception of the hot briquetting section, the hourly throughput of all the equipment has been demonstrated at above its design capacity.

KRP1 is designed to treat 200,000 tonnes per annum (tpa) of a waste material (Electric Arc Furnace Dust "EAFD") produced by the recycling of scrap iron and steel. The EAFD is now being delivered under exclusive supply agreements with all eight of the steel companies contracted for the first phase of development. The second phase of development will double capacity and is planned for completion in 2013.

The plant uses technology that involves both process and equipment innovation. The process involves the efficient separation of zinc into a high quality zinc concentrate (76,000 tpa) and the reduction of residual iron into an intermediate product (80,000 tpa) that can be used as a scrap substitute.

Zinc recovery rate is steadily improving and is generally between 92% and 99% (target: 97%). The zinc concentrate which has a zinc grade of over 63% (target: 58%), is being sold to Korea Zinc as part of a ten year offtake agreement.

The metallic content of the iron product forms the basis of its valuation. The proportion of iron that is reduced to its metallic form is known as the metallization rate which is now about 80% (target: 80%-85%).

During July, as planned, the operation was suspended for two weeks while a number of equipment modifications were made to improve reliability and enable process optimization to achieve targeted process objectives. Since the completion of this work, process objectives have been demonstrated and the ramp-up has resumed with improved availability and sustained hourly throughput. Some minor equipment reliability and throughput issues remain outstanding but solutions have been identified and remediation work is either underway or pending the delivery of upgraded equipment.

As mentioned above, the equipment has been demonstrated at or above its design capacity. Overall plant throughput is, however, a function of both hourly throughput and the availability of the plant, which will depend on the downtime required for maintenance and repairs. Overall plant throughput is expected to reach 85% by the end of September and 90% by the end of October.

The hot briquetting section of the plant requires modification and upgrading. Hot briquetting will resume at the end of August when this work is scheduled for completion.

Commenting on the announcement, Andrew Woollett, ZincOx's Chairman, said, "The success of the process has now been clearly demonstrated and while full production is taking slightly longer to achieve than expected, solutions for the outstanding issues have been identified and we are looking forward to positive cashflow in the near future"

Further updates on progress will be circulated as the plant ramps up to full production.

For further information please contact: