ZincOx Resources PLC Proposed Fundraising for Working Capital (9769G)
26 November 2015 - 3:06AM
UK Regulatory
TIDMZOX
RNS Number : 9769G
ZincOx Resources PLC
25 November 2015
ZincOx Resources plc
("ZincOx" or the "Company")
Proposed Fundraising for Working Capital
ZincOx (AIM:ZOX), announces that due to the continuing weakness
of the zinc price the Company is looking to raise at least US$6.5m
in a fundraising for working capital.
In the interim results published on 30 September 2015, the
Company warned that if there was no material recovery in the zinc
price, then trading at around US$1660, the Company may need to
review its financing options including raising further capital.
Since then, the price has fallen a further approximately 10%
touching a recent low of US$1,487 per tonne.
Given the sale of zinc concentrate is linked to the zinc price
and since concentrate is the only income of the business, the
decline in the zinc price has had a material adverse impact on the
cash position of the Company and absent a new injection of capital,
the Company will face a shortfall in its cash position by the end
of 2015.
The Company has been exploring various options in respect of its
funding needs and is now considering a placing with potential new
and existing shareholders to raise $6.5m ("Fundraising"). Based
upon various assumptions, including a sustained recovery of the
zinc price to an average of not less than US$1,650 during 2016, the
Directors believe this should be sufficient to cover the funding
needs of the Company for the next 12 months. A letter and notice of
general meeting will shortly be posted to shareholders seeking
authority to allot new ordinary shares and disapply pre-emption
rights in relation to the fundraising.
The Company also notes that it is in advanced discussions with
Korea Zinc to defer and reschedule the interest and principal
repayments due from February 2016 in respect of the outstanding
loans. The proposed Fundraising will be conditional upon resolution
of these discussions.
In the event that the Company is not able to secure sufficient
funding through the Fundraising or alternative sources of funding,
the Company will transfer 90% of the equity in the Korean Recycling
Plant (KRP) to Korea Zinc and thereby retain a 10% interest.
The first shipment of imported EAFD has now arrived at KRP and
as foreseen in the Half Year Report, during the scheduled
October/November three week closure, various remediation works were
undertaken, including removal of the heat exchangers. KRP has
restarted and hourly throughput is over 92% of target.
For more information please contact:
Tel: +44 (0) 127
ZincOx Resources plc 645 0100
Andrew Woollett, Chief Executive
Officer
Peel Hunt LLP (Nominated Adviser Tel: +44 (0) 207
and Joint Broker) 418 8900
Daniel Harris
Euan Brown
finnCap Limited (Joint Broker) Tel: +44 (0) 207
Joanna Scott 220 0500
Christopher Raggett
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
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