ZincOx Resources PLC Update (6538W)
November 11 2014 - 1:01AM
UK Regulatory
TIDMZOX
RNS Number : 6538W
ZincOx Resources PLC
11 November 2014
11 November 2014
ZincOx Resources plc
("ZincOx" or the "Company")
Korean Recycling Plant Update
and Strategic Partner Sought For Future Projects
ZincOx Resources plc ("ZincOx") is pleased to announce continued
improvement in the performance of its Korean Recycling Plant
("KRP").
The month of October saw record improvements in many key
operating areas:
- 14,979 tonnes of EAFD treated, 8% higher than the previous record
- 3,475 tonnes of zinc in concentrate produced, 2% higher than
the previous best which had been achieved when the zinc grade of
EAFD was significantly higher
- 91% zinc recovery
Availability continues to improve and unit operating costs are
moving towards long term targets. These improvements enabled KRP to
generate a positive underlying EBITDA(1) of US$700,000 for October
at plant level which covered, for the first time, the Company's
monthly interest payments and corporate overhead costs at Group
level.
Notwithstanding the improved performance of the plant, at the
beginning of November, following the discovery of an area of
elevated temperature on the outer flue area due to a loss of
refractory, it was necessary to suspend feeding in order to repair
the refractory. This hot spot was the result of an air injector
being blocked causing penetration of air behind the refractory.
Having identified the problem, such blockages can be avoided in the
future.
An inspection and report on the refractory has been undertaken
by an independent specialist who is satisfied with its general
condition although he has made certain repair recommendations which
are being implemented so as to improve reliability and avoid
further unforeseen stoppages.
The current repairs are expected to last about two weeks and
following the restart, the ramp-up will continue with the objective
of reaching full production in the first quarter of 2015. These
repairs will leave the Company with lower cash reserves than it
would normally operate with, but following the restart and with
continued good performance through the remainder of November and
December, cash reserves should be restored to a more normal
level.
Now that KRP's rotary hearth furnace is approaching full
production, the Company is beginning to accelerate the planning to
rollout the technology to other Asian countries. These are based on
a strategy to add value to both the zinc concentrate and iron
product. New recycling plants will include equipment designed to
take advantage of the special characteristics of these intermediate
materials for the production of more valuable industrial products
that will significantly enhance the overall economic returns.
Given the substantial cost of building new projects, the Company
has commenced a search for supportive long term capital providers
(through debt and equity) and strategic partners to fund the future
rollouts.
Commenting on the announcement;
Andrew Woollett, ZincOx's Chief Executive Officer said "Since
recovery was stabilised above 90% in the summer, we have been
concentrating our efforts on greater throughput; this has risen
dramatically in October and we expect this progress to continue
over the next few months. The impact of this increase has enabled
us to cover monthly interest charges and corporate costs and we
look forward to building on this cashflow as we reach full
production."
For further information please contact:
ZincOx Resources plc Tel: +44 (0) 127 645 0100
Andrew Woollett, Chief Executive Officer
Peel Hunt LLP (Nominated Adviser and Joint Tel: +44 (0) 207 418 8900
Broker)
Richard Kauffer
Daniel Harris
finnCap Limited (Joint Broker) Tel: +44 (0) 207 220 0500
Matthew Robinson
Joanna Weaving
Tavistock Communications (Financial PR) Tel: +44 (0) 207 920 3150
Simon Hudson
Nuala Gallagher
1 Earnings before interest, tax, depreciation and amortisation
(adjusted to exclude foreign exchange gains and losses)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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