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14/10/2011

ZincOx chief says the company is on budget and on schedule to deliver production in Feb 2012

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Additional Information
Market: AIM
Sector: General Mining - Zinc, Lead and Tin
EPIC: ZOX
Latest Price: 68.75p  (1.85% Ascending)
52-week High: 85.00p
52-week Low: 49.50p
Market Cap: 61.20M
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ZincOx Resources
www.zincox.com

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 is to become a major low cost zinc producer.

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ZincOx transformation not in the price, says broker

15th Dec 2011, 3:39 pm by Philip Whiterow ZincOx is an “electric arc furnace dust” recycling business, says the broker

ZincOx‘s (LON:ZOX) transition from developer to zinc concentrate producer should see the shares re-rate significantly in the next 6 months, according to broker Singer Capital.

ZincOx commissions its first recycling plant in March 2012 and when it does it will become a zinc concentrate producer without the inherent risks of mining, the broker said.

It has a target price of 128p, largely based on the value of the first plant, Korean Recycling Plant 1.

The low cost zinc grade feed the plant will process is waste material derived from Korean steel producers and should be available in perpetuity.

Because of that, the company’s shares can rated on an earnings multiple argues Singer.

On one plant and the current US$2,000 zinc price, the shares trade on a 2013 EV/EBITDA of 4.5, a rating that should fall further as production increases.  

The long term investment case is also very attractive adds Singer. If ZincOx can demonstrate its technology successfully in Korea, there is the possible of more plants around the world and for underlying earnings to exceed US$100m within 5 years.

ZincOx is an “electric arc furnace dust” recycling business, says the broker.

Electric arc furnace dust (EAFD) is the waste material produced by melting galvanised ferrous scrap in electric arc furnaces (EAF) and is classified as hazardous waste due to the arsenic, mercury, lead and cadmium content.

But is also contains zinc (c.20%) and iron (c.25%) and is a high quality zinc pre-concentrate for an EAFD recycler like ZincOx.

If it can obtain a well priced long term supply of EAFD and has the correct technology, the company has a defensive high margin zinc business, concludes Singer.

Shares were little changed today at 53.45p.

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