ZincOx Resources PLC Production Update (2305X)
09 January 2014 - 6:00PM
UK Regulatory
TIDMZOX
RNS Number : 2305X
ZincOx Resources PLC
09 January 2014
9 January 2014
ZincOx Resources plc
("ZincOx" or the "Company")
Production Update
ZincOx Resources plc, (AIM: ZOX), the developer of Asia's
largest zinc recycling project, is pleased to report the latest
progress at its wholly owned Korean Recycling Plant (KRP). The KRP
is in the final months of ramp-up to full production which remains
on target for Q2, 2014.
Since the start of 2014, having dealt with numerous maintenance
and repair issues during 2013, production has ramped up steadily
towards the target. Our efforts, together with improvement in the
zinc price, ought to result in 2014 becoming a turnaround year for
the Company. The average LME zinc price for 2013 was US$1,909 and
we have recently seen this price averaging US$2,050 which can have
a significant impact on the Company's earnings profile.
In November, corrosion to some of the welds at KRP caused us to
close one line of heat exchangers. The line was isolated using the
blind flange concept which ZincOx had successfully demonstrated in
September, and enabled production to recommence using one line. The
welds affected within the corroded unit highlighted the complexity
of making completely reliable welds while making major repairs in
situ. To avoid this, the corroded unit was moved to a workshop
where an entirely new inner tube was inserted and subsequently
reinstalled in December. Following the fundraising in November, a
special grade of stainless steel was ordered and is expected to
arrive in Korea before the end of January. This metal will be used
to create new inner shells that are expected to have an operational
life of at least 18 months.
The use of pure oxygen, to enrich the concentration in the
combustion air injected into the furnace, has had a number of very
beneficial consequences. As a result, the oxygen plant is being
enlarged to maximise these benefits; this work should be completed
next month. Combustion air will be gradually further enriched
through the course of January and February, which is expected to
enhance the production ramp-up.
The steel shell of all high temperature furnaces is protected by
an internal insulating lining of refractory material. This solid
concrete-like material expands as the furnace heats up and
contracts as it cools. Furnaces will periodically require small
repairs in areas that experience high strain as a result of thermal
expansion, such as protruding corner points. During December, three
such areas began to shed small amounts of refractory and lumps were
detected on the hearth. All the refractory in areas most
susceptible to high strain have been replaced.
As a result of these repairs, production was limited during
November and December 2013 with the production and sale of 2,289
and 1,145 tonnes of zinc in concentrate respectively in that period
bringing the full year's production to 24,577 tonnes, resulting in
revenues in Korea for the year in excess of US$26 million. January
and February are planned to be full operating months, while in
March there will be a planned short stoppage for maintenance.
Commenting on the announcement, Andrew Woollett, ZincOx's
Executive Chairman, said:
"We are very satisfied with the recent performance of the blind
flange concept which enabled production to continue while one line
of heat exchangers was repaired. The timing of the refractory
repair in December was unfortunate as it stalled our ramp-up
momentum, but this has already been re-established and we remain
confident of achieving targeted full capacity. We are looking
forward to a very productive 2014 and also to a firmer zinc price,
which recently seems to be responding to the planned closure of
major zinc mines."
For further information, please contact:
Tel: +44 (0) 1276
ZincOx Resources plc 45 0100
Andrew Woollett, Executive Chairman
Peel Hunt LLP (Nominated Adviser Tel: +44 (0) 207
and Joint Broker) 418 8900
Richard Kauffer
Daniel Harris
Matthew Brooke-Hitching
finnCap Limited (Joint Broker) Tel: +44 (0) 207
220 0500
Matthew Robinson
Joanna Weaving
Tavistock Communications (Financial Tel: +44 (0) 207
PR) 920 3150
Simon Hudson
Nuala Gallagher
This information is provided by RNS
The company news service from the London Stock Exchange
END
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