TIDMZOX 
 
RNS Number : 7936X 
ZincOx Resources PLC 
13 December 2010 
 

 
 
 
 
13 December 2010 
 
                              ZincOx Resources plc 
 
 
 
                        Korean Recycling Plant Financing 
 
ZincOx Resources plc ("ZincOx" or the "Company") is pleased to announce the 
signing of a Letter of Intent ("LOI") with Korea Zinc Co Ltd and its affiliate 
("Korea Zinc") for the provision of loans amounting to US$50 million (the 
"Loans") for the development of the South Korean Recycling Plant ("KRP") and an 
Off-take Agreement to purchase the unwashed zinc concentrate produced from Phase 
1 of the KRP development. The Board is pleased to announce that the Loans, once 
finalised, together with the existing cash within the business, will allow the 
Company to move forward with the construction of Phase 1 of the KRP with the 
intention to achieve first production, on the current development schedule, in 
Q1 2012. 
 
Korea Zinc 
Korea Zinc is an integrated zinc and lead producer with over 30 years of history 
in smelting. In 2009 it produced 440,000 tonnes of zinc from Onsan in South 
Korea, 280,000 tonnes from Sukpo in South Korea and 220,000 tonnes from 
Townsville in Australia. 
 
Korea Zinc entered into the LOI following a due diligence exercise that examined 
in detail the technology to be used by ZincOx. The Off-take Agreement is for the 
entire zinc concentrate production and lasts for ten years from first 
production.  The Off-take Agreement is for unwashed zinc concentrate and so it 
removes the requirement for ZincOx to develop a washing plant, thereby saving 
approximately US$17 million of capital expenditure from the original phase 1 
development plan. This brings the current cost of the project to US$110 million, 
including financing charges, of which approximately US$5 million has already 
been spent. The provision of the loans will require a balance of US$55 million 
for the completion of the project, which will be provided by ZincOx as equity 
from its existing treasury. As at the 30 June, ZincOx held GBP42.3 million 
(US$66 million) in cash. 
 
Under the terms of the LOI, Korea Zinc will be providing two loans, the Off-take 
Loan and the Development Facility. 
 
Off-take Loan 
The Off-take Loan is for US$35 million and will bear interest at 5 per cent per 
annum over LIBOR. It will be repaid as a single bullet on the expiry of the 
Off-take Agreement approximately 11 years after first drawdown. It will be drawn 
down in three instalments following the investment of approximately three equal 
tranches of equity provided by ZincOx. 
 
Development Facility 
The Development Facility is for US$15 million and will bear fixed interest at 15 
per cent per annum.  It will be repaid from KRP's free cash flow, after 
deduction of interest on the Offtake Loan, or as a bullet repayable at the end 
of three years. 
 
ZincOx will stand as guarantor for both loans which may be repaid at any time 
without penalty. 
 
 
KRP 
The KRP will treat 200,000 tonnes per annum of steel waste dust (EAFD) in Phase 
1 and produce approximately 70,000 tonnes of zinc concentrate with a grade of 58 
per cent zinc and 95,000 tonnes per annum of an intermediate iron product. 
Capacity will then double under Phase 2 which will be developed following the 
commissioning of Phase 1. Financing for Phase 2 will be put in place by the 
Company in due course. ZincOx has staged ten year supply agreements for EAFD 
with all the electric arc furnace operators in South Korea for both Phase 1 and 
Phase 2. 
 
Based on the financing described herein, at the current metal prices 
(zinc:US$2,250 per tonne, pig iron US$450 per tonne) as a basis for the pricing 
of the zinc concentrate and iron intermediate products, KRP Phase 1 has a post 
tax net present value of approximately US$97 million, an internal rate of return 
of approximately 30 per cent and is expected to generate a project EBITDA of 
about US$29 million per annum. 
 
Commenting on the announcement, Andrew Woollett, ZincOx's Executive Chairman 
said "We are pleased to have reached agreement with Korea Zinc regarding these 
financing arrangements and that we can now move forward with our first metal 
recycling project in Korea. The offtake and financing package represents a very 
attractive structure that enables the project to release more cash in the early 
years than would be possible using normal project finance.  It also means that 
our interest in KRP has not been diluted as would have been necessary by the 
introduction of a partner. Following our entry into a long term lease over the 
KRP site last week, we are now able to press forward with the development 
without delay and are focused on achieving first production in Q1 2012 with a 
ramp up to full production within six months." 
 
For further information, please contact: 
ZincOx Resources plc 
 Andrew Woollett, Executive Chairman 
 Peter Wynter 
Bee, Managing Director 
 +44 (0) 1276 450100 
Nominated Adviser and Broker 
 Ambrian Partners Limited 
 Andrew Craig / Jen 
Boorer 
 +44 (0) 20 7634 4700 
Conduit PR 
 Leesa Peters / Charlie Geller 
 +44 (0) 20 7429 6666 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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