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ZincOx Resources' principal priority is the creation of value by the development of mining and recycling operations that benefit from low cost processing of unconventional zinc bearing materials. Secondarily and where financing is available, added value will be created by the development of refining operations. The company's objective...Read more
ZincOx confirms ORP’s project financing and supply negotiations on trackApril 19 2010, 11:09am
In response to press reports, connected with the forthcoming general meeting, ZincOx Resources (AM: ZOX) has confirmed that its position regarding its financing arrangements and EAFD supply agreements for its main project remains unchanged.
The company reiterated that it has received a banking mandate and term sheet which is currentlt being considered by the board in order to raise US$60 million which, along with its cash resources, will be sufficient project finance for its ORP (Ohio Recycling Project) without further recourse to shareholders. ZincOx also said that negotiations are underway to secure EAFD (electric arc furnace dust) supply contracts.
In recent weeks, the company has been embroiled in a dispute with two minority shareholders, together holding approximately 5%. ZincOx has previously stated that it has strong support from its major shareholders with written confirmations representing over 50% of the company’s voting rights.
The rebellious minority shareholders want to oust 6 directors and propose an alternative strategy in favour of Waelz Kiln zinc recycling rather than RHF technology (Rotary Hearth Furnace).
The matter will go to a shareholder vote at a general meeting held on Friday 23 April 2010.
The requisitioning shareholders are Aldersgate Investment Managers and US SDR LLC - owned by Russ Robinson. US SDR LLC was founded in 2006 to build and operate Waelz Kiln processing plants to recycle EAFD to produce zinc oxide and waelz iron product. US SDR sold its Waelz Kiln plant in Alabama in October 2009.
Earlier this month, ZincOx said the proposals are not in the company's best interests and they are misguided. “The board believes that Mr Robinson's plans may not be achievable, would take significant time to implement, would become vulnerable should zinc prices fall and are unlikely to be as attractive to steel mills given they cannot offer the same reduced level of tipping fee or environmental benefits”, ZincOx stated.
In terms of the respective technologies, ZincOx said that Waelz Kiln is inferior to the RHF and adopting the alternative technology would fundamentally compromise the company’s ambition to create a global low cost, environmentally superior, zinc recycling company.
According to ZincOx, RHF has both commercial and environmental advantages over Waelz Kiln.