Zincox Resources Plc Regulatory News (ZOX)

25 Jan 2007 07:00

ZincOx Resources PLC25 January 2007 ZincOx Resources plc 25 January 2007("ZincOx" or "the Company")(AIM:ZOX) US$9 million received as the first instalment of the Shaimerden deferredpayments ZincOx Resources plc has received US$9,042,776 from JSC Kazzinc (Kazzinc), beingthe first tranche of the deferred payment due under the 2003 sale agreement forthe Shaimerden zinc deposit, in Kazakhstan (the Agreement) Commenting on the announcement, Andrew Woollett, ZincOx's chairman, said "Thispayment is the first of five payments which we expect to increase substantiallyover the next couple of years and will continue beyond the point at which weplan to have our own operations in production". Under the Agreement the deferred payments are being made in respect of the first200,000 tonnes of zinc mined from the deposit, at the rate of US$0.2375 pertonne for every dollar that the price of zinc is above US$800 per tonne. Thezinc price is based on the average daily LME price for the period and paymentfor the year is before the end of January of the following year. While production commenced at Shaimerden on 17 September, the 2006 payment isbased on a deemed minimum annual production of 40,000 tonnes. This is reducedpro rata for the period 17 September to the year end and therefore amounts to11,616 tonnes. The zinc price from 17 September 2006 through to the end of thatyear was an average of US$4,077 and hence the amount received by the Company wasUS$9,042,776. In addition to a minimum rate of production there is a maximumrate equivalent to 60,000 tonnes per annum. Independent consulting mining engineers, Orelogy Pty Ltd, have carried out areview of Kazzinc's mine plan for Shaimerden. Orelogy have confirmed that themine plan is reasonable and achievable and that mining of 200,000 tonnes of zincshould actually be achieved by September 2007. ZincOx can, therefore, expect thedeferred payments to be based on the deemed maximum rate of production, 60,000tonnes of zinc per annum, for 2007, 2008 and 2009 and the balance of 8,384tonnes for 2010. For more information please contact: ZincOx Resources plcSimon Hall +44 (0) 1276 450100shall@zincox.comwww.zincox.com Conduit PRLeesa Peters/Laurence Read +44 (0) 20 7618 8708leesa@conduitpr.com +44 (0) 781 2159885 This information is provided by RNS The company news service from the London Stock Exchange