TIDMZOX
RNS Number : 9159R
ZincOx Resources PLC
11 November 2011
ZincOx Resources plc
("ZincOx" or the "Company")
GBP6.25 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 GBP6.25 million before expenses.
Highlights
-- GBP6.25 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:
ZincOx Resources plc Tel: +44 (0)1276 450 100
Andrew Woollett, Executive Chairman
Peel Hunt LLP (Nominated Adviser and Joint Tel: +44 (0)20 7418 8900
Broker)
Richard Kauffer
Daniel Harris
finnCap Limited (Joint Broker) Tel: +44 (0)20 7220 0500
Matthew Robinson
Joanna Weaving
Tavistock Communications Tel: +44 (0)20 7920 3150
Paul Youens
Simon Hudson
Lydia Eades
1. Details of the Placing
On behalf of the Company, Peel Hunt LLP ("Peel Hunt") and
finnCap Limited ("finnCap") have jointly raised approximately
GBP6.25 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.
Circular posted to Shareholders 15 November 2011
Latest time and date for receipt of forms 3 p.m. on 30 November
of proxy in connection with the General 2011
Meeting
General Meeting 3 p.m. on 2 December
2011
Admission and commencement of dealings 8 a.m. on 5 December
in the Placing Shares 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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