Final Results

22 May 2012

ZincOx Resources plc

("ZincOx", the "Company" or "the Group")

Final Results for the

year ended 31 December 2011

ZincOx Resources plc (AIM Ticker: ZOX) which specialises in the low cost recovery of high grade zinc compounds from unconventional sources, today announces its results for the year ended 31 December 2011.

Highlights for the period  

·; US$50m loan facility concluded with Korea Zinc for KRP Phase 1 ("KRP1")

·; Construction completed without lost time injuries 

·; £6.25m (excluding costs) raised through equity placing in December

·; Cash balances of £12m at year end

Highlights post period

·; US$110m construction of KRP1 completed on time and budget

·; Process demonstrated successfully

·; Start-up permit obtained. All permits now awarded.

·; Production commenced in May

·; First production of zinc oxide concentrate (HZO) delivered to Korea Zinc

Commenting today Andrew Woollett, Executive Chairman, said:

"We are delighted that our first recycling plant is now in operation and that the process has been successfully demonstrated in Korea. We are excited by the prospect of the full ramp up on KRP1 while we start the development of KRP2 and push ahead with working up projects elsewhere in the world" 

For further information, please go to: www.zincox.com

ZINCOX RESOURCES PLC

ANNUAL REPORT 2011

CHAIRMAN'S STATEMENT

2011 has seen a huge transformation in the Company's fortunes and we are well on our way to realising our ambition of becoming a major zinc recycling company. At the start of the year we had not yet started site work on the land we had agreed to rent for the development of our first recycling plant in South Korea; by the end of the year the US$110 million project was almost complete, and I am delighted to report that we have now commenced production and we will gradually build up to full capacity over the next few months.

The development of the first phase of the Korean Recycling Plant ("KRP1"), which is designed to process 200,000 tonnes per annum of Electric Arc Furnace Dust ("EAFD"), will make it the largest EAFD recycling facility in Asia. The development of the second phase ("KRP2"), a further 200,000 tonnes of EAFD per annum, will make ZincOx the third largest recycler of this material in the world. When in full production, KRP(1&2) will produce 92,000 tonnes of zinc per annum in a high grade concentrate which, if it were a zinc mine, would make it one of the largest zinc mines in the region. Unlike a zinc mine, however, we are not relying on a finite reserve of limited life, but rather on EAFD supply contracts with major steel companies where we are providing an essential service that will be required for as long as iron and steel scrap is being recycled.

It also gives me great pleasure to inform you that the plant was completed without so much as a single lost time injury. After 500,000 man hours and fast track development with, at times, numerous concurrent activities in a small working area, this is an outstanding performance. Safety, whether during construction or production, is of paramount importance to the Group and this will continue to be instilled in our new production team in Korea so as to maintain the same vigilance during their daily work.

The Rotary Hearth Furnace is at the core of the process employed at KRP. While it has been used to treat waste dusts from integrated steel works for about a dozen years, previous attempts to use the technology to recover zinc from dusts generated by Electric Arc Furnaces recycling carbon steel, had been spectacularly unsuccessful. However, with the benefit of an exceptional technical team and a focused strategy, we have been able to overcome the previous challenges presented by this feedstock. The entire process flowsheet, including feed preparation and gas handling, was stripped back to basics and redesigned with a view to optimising zinc and iron recovery and reducing energy consumption. It is still early days and we are still ramping up to full capacity, targeted recovery and product quality. However, several of the features of the process that many in the industry thought impossible have now been demonstrated, for example, the integrity of the briquettes, the efficiency of the feeding and discharging, a novel heat exchange system and high energy efficiency, all of which lead to the high zinc recovery and iron metallisation required for production of saleable products. With these important challenges overcome we are confident that the plant can operate as anticipated.

The schedule for the development was maintained very strictly throughout the year, notwithstanding changes to certain regulations that were unforeseen during the initial planning stages. Similarly, the budget was carefully controlled, and while there were a number of unforeseen additional expenses, these were largely offset by savings elsewhere in the budget. While it will still be a few months before the final cost will be known, if there is an overrun it should not be too significant. Indeed the single greatest additional cost was due to exchange rate fluctuations involving a period of exceptional strength of the Korean Won in the middle of the year. Were it not for this, expenditure would have been under budget. I am sure shareholders would like to join me and my fellow directors in thanking the development team for their excellent work.

Financing for the project was through a combination of ZincOx's equity and two loans provided by Korea Zinc, one of the world's largest zinc metal producers. During the course of the year we drew down the Offtake Loan in three tranches as planned, with the second loan, the Development Loan, being drawn down during 2012. Towards the end of the year, although we were confident that the project would be completed within budget, we decided to raise some additional finance by the placing of £6.25 million of new shares at 56p, the then market mid price. These funds give us an extra contingency provision in the event of a slower than expected ramp up and provide us with resources to pursue both the expansion of KRP and the pursuit of recycling projects elsewhere in the world.

The placing gave us an opportunity to bring two new large institutional investors onto our register, which together with our other institutional shareholders, constitute about 70% of the ownership of the Company. Institutional shareholders are certainly an important element in any fundraising and I am greatly indebted to a number of them for their loyal support over the past few years, many of which have been extremely frustrating and challenging.

While institutional shareholders are critical, so too are individual private shareholders. For a small company such as ZincOx, day to day share trading is vital to maintaining real liquidity, i.e. a continuous market, in our shares, and this is down to private investors. In order to try to service these shareholders as efficiently as possible, in September we appointed finnCap as joint brokers to the Company. It has strong relationships with most of the larger private client brokers, and we look forward to their continuing support to broaden our shareholder base.

The appointment of finnCap led us to carry out a review of our broking requirements, as a result of which, we decided to appoint Peel Hunt as our main brokers. Peel Hunt is one of the most highly rated brokers to small and mid-cap companies and its very strong "Clean Tech" research capability will, I am sure, become increasingly relevant for us in the months and years ahead.

In the middle of the year we came out with a revised cost estimate, US$100 million, for KRP2, for the doubling of the existing plant's capacity. At the beginning of 2012 we started to work on the basic engineering for KRP2. An engineering and costing study by Xmetech is nearing completion, and that will enable us to put together a feasibility study of sufficient detail for us to raise commercial debt. We have been working with a bank on a suitable project finance structure for KRP2 for a number of months.

It is likely that any chosen bank would require a significant proportion of our zinc sales to be hedged and hence the exact amount of the loan is not known at this time. Together, with our existing equity contribution, it will not, however, be sufficient to cover the full cost of the development of KRP2. It is likely, however, that the shortfall could be provided by a company interested in purchasing our zinc product, in much the same way as Korea Zinc provided loans against their offtake rights for KRP1's zinc concentrate production.

Other Recycling Projects

While almost all our staff continue to focus on KRP, we are now very actively pursuing a number of exciting zinc recycling projects elsewhere in the world. I hope we may be able to announce progress on some of these well before the end of this year.

Mining

The continuing uncertainty of the political and security situation in Yemen has meant that the refinancing of the Jabali project has not been achieved during the year. We continue to look at options to realise the value of our past investment.

Outlook

In the immediate future, the Company's main focus is to bring KRP1 up to full production. At the same time, however, we will be pressing ahead with the engineering design and costing of KRP2 and its financing and commencement of development before the end of the year. In addition, I hope to be able to announce plans for developments elsewhere in the world.

We are convinced that the process we are using at KRP is a breakthrough that we can replicate around the world and we intend to pursue aggressively these opportunities so that we may make the best of our significant first mover advantage. I should like to thank my fellow directors and all our shareholders for their support of the management and their faith in this technology over the past year and I look forward to their sharing in the rewards that will result from expanding our operations around the world.

Andrew Woollett

Chairman

21 May 2012

REVIEW OF OPERATIONS

RECYCLING

Korea, Korean Recycling Plant

Significant progress was made with the development of KRP1 during the course of 2011 and the construction was completed in April 2012. The process has now been successfully demonstrated and production is ramping up.

At the end of 2009, ZincOx applied for Foreign Investment Zone status for the site and this was granted in May 2010. This grant provides the plant with a number of tax benefits including a tax holiday for seven years. It also enabled the government to purchase for US$20 million a site for the plant and in December 2010 a 50 year lease was entered into under which the first five years are rent free.

Financing for the project was through a combination of ZincOx's own equity (US$60 million) and loans provided by Korea Zinc (US$50 million), one of the world's largest zinc metal producers. Following a memorandum of understanding in December 2010 definitive agreements with Korea Zinc were entered into in April 2011. Under these agreements, Korea Zinc provided development loans for KRP1 and will purchase all the zinc concentrate, at market rates, produced from KRP1. Zinc concentrate produced by KRP2 is not subject to these agreements.

The KRP has been designed to treat 400,000 tpa of EAFD. The EAFD is being supplied by all Korea's steel recycling companies under 10 year supply agreements. A number of sampling campaigns over the past 5 years have demonstrated that the EAFD contains about 23% zinc and 28% iron.

KRP is being developed in two equal phases. Having completed KRP1, it is intended that the development of KRP2 will commence before the end of 2012. The financing of KRP2 is already being progressed through ongoing discussions with banks. When in full production both KRP1 and KRP2 combined are expected to produce 92,000 tonnes of zinc in concentrate per annum and about 100,000 tonnes of iron in ZHBI.

Xmetech, a Korean company that was formerly the engineering division of Korea Zinc, was responsible for the construction of KRP1 and has been retained for the development of KRP2. Xmetech are currently undertaking a costing study for KRP2. The previous estimate of the capital cost for KRP2 is about US$100 million and a schedule for the development, about 15 months.

The construction of KRP2 will be greatly assisted by the experience acquired through the recent development of KRP1.

The KRP site covers 9.2 hectares in the Cheonbuk Industrial Complex, which lies about 10 kilometres south west of Pohang, Korea's largest steel making city. Following the signature of the 50 year lease over the site at the end of November 2010, the plant layout was designed for both phases of development and also provides a melting plant for the iron product should this be required.

At a zinc metal price of US$2,250 per tonne and using current energy costs, KRP1 when operating at 200,000 tpa of EAFD is expected to generate approximately US$31.2 million of earnings per annum, before interest, tax, depreciation and amortisation.

Thailand, South East Asia Recycling Project

ZincOx has been active in Thailand for several years, and the Company has plans for a plant similar in size to KRP1. The recycling plant in Thailand ("SEARP") would treat EAFD generated throughout the South East Asian region. The Company has re-engaged with various steel companies for the provision of their EAFD under long term supply agreements. Very recently the Company hosted a very successful visit by a delegation of stakeholders from Thailand in order that they could appreciate the significant advantages of the RHF technology.

We have obtained strong support from the Thai government and the local steel industry for our plans in Thailand.

We have also negotiated the purchase of a site in a newly developed industrial area on which an environmental impact assessment has commenced. This will be followed by basic engineering, costing and the production of a full feasibility study that will enable us to raise project finance. As an alternative to ZincOx providing the entire equity component for the development, discussions have commenced with potential offtakers and other parties who would be interested to provide finance or act as partners in the project.

Turkey, Aliaga Recycling Project

The Company has been active for many years in Turkey, where it has two adjacent sites amounting to 6.4 hectares in the Aliaga Heavy Industrial Zone, near Izmir. Turkey is the largest importer of scrap in the world and its growing steel recycling industry produces about 400,000 tonnes of EAFD per annum. The Aliaga Heavy Industrial Zone is a major centre of steel production and about 160,000 tonnes of EAFD is produced there annually. In line with a request to help rationalise the land ownership in the Industrial Zone, the two sites are being reorganised as a single rectangular plot that will better lend itself to plant development. Environmental permitting is due to restart shortly.

The plant at Aliaga is planned to treat 200,000 tpa of EAFD and a systematic sampling programme of the EAFD in Turkey undertaken some years ago indicated an average grade of about 24% zinc.

USA, Ohio Recycling Project

Before it was decided to make the KRP the Company's first development project, considerable work had been undertaken on the Ohio Recycling Plant ("ORP"). The Company owns a six hectare site near Delta, Ohio, which is well serviced by road and rail and is capable of offering competitive EAFD transport costs from numerous mills in northern USA and Canada. The environmental permit for the site lapsed in August 2010 but subsequent discussions with the Environmental Protection Agency indicated that it should be possible to obtain the necessary permit again without undue delay.

One of the delays in developing this project was the time it was taking to negotiate long term EAFD supply agreements with the steel mills. Under the regulations pertaining to the treatment of EAFD in the USA, any unforeseen problems in the operation of the ORP could lead to severe financial liability for the mills supplying the EAFD. ZincOx believes that, having demonstrated the efficiency and reliability of the RHF process, its superior environmental characteristics and the production of a valuable iron product, it should be possible to enter into long term EAFD supply contracts.

USA, Big River Zinc Smelter

ZincOx owns the Big River Zinc ("BRZ") electro-refinery near St Louis, USA. This 100,000 tonnes per annum zinc production facility is currently on care and maintenance but acts as a base for ZincOx operations in North America. The BRZ site is permitted for the disposal of halide bearing solutions of the type generated by the upgrading of zinc oxide concentrates derived from EAFD. As such, it could be used as the washing site for upgrading zinc oxide concentrate derived from the ORP or other rotary hearth based plants in North America. In the meantime it carries out upgrading of zinc oxide concentrates from Waelz kiln operations on behalf of third parties as well as providing sulphuric acid storage and distribution. The Company is also looking for other opportunities to utilise the assets at BRZ.

MINING

Yemen, Jabali Zinc and Silver Mine

The exploitation and development rights to the Jabali zinc deposit are owned by Jabal Salab Company (Yemen) Limited ("Jabal Salab"), in which ZincOx holds a 52% interest. The balance of 48% is held by Ansan Wikfs Investments Limited ("Ansan").

The Jabali deposit contains a mineable reserve of 8.7 million tonnes of ore at an average grade of 9.2% zinc and 68 grams per tonne of silver. The development of the mine and processing facilities commenced in 2008 but following the withdrawal of funding by bondholders in 2009, that activity at the site during 2010 and 2011 was much reduced pending the re-financing of the project. The development planned to mine the deposit at the rate of 800,000 tonnes per annum by open pit with a strip ratio of 2:1. Ore was to be crushed and calcined prior to milling and leaching using ammonia based solutions. Following purification, zinc carbonate would have been precipitated and calcined for the production of 70,000 tonnes per annum of very high quality zinc oxide (>79% zinc) containing approximately 56,000 tonnes of zinc. The zinc oxide was to be bagged and shipped in part to customers in the paint and ceramics industries. The balance would have been shipped to Jabali's Rubber Grade Plant ("RGP") in Belgium where it would be further milled to produce a high quality product required by the rubber industry. It was planned to extend the plant to treat the silver bearing residue once the zinc oxide operation had reached operational capacity. This extension would use conventional processing technology to recover silver in doré bars for the production of 1.4 million ounces of silver per annum.

FINANCIAL REVIEW

Results

The Group loss after tax attributable to shareholders of the parent company was £6.1 million compared to a loss of £69.3 million last year. The loss in 2010 was largely attributable to the impairment provisions made against the Jabali Mine (Group share of £51.9 million) and the recycling assets held in the USA (£19.5 million). The Group had an underlying operating loss of £5.6 million (2010: loss of £2.6 million) in the year. The administrative expenses deducted in arriving at the underlying operating loss in the year amount to £5.3 million (2010: £4.8 million). In addition, an unrealised foreign exchange loss of £0.9 million (2010: gain of £1.2 million) has also been deducted in arriving at the underlying operating loss as a result of non sterling balances being held as cash at the year end and due to the adverse movement in the US dollar and Korean Won ("KRW") exchange rate through 2011. In light of the changing nature of the Group, from a development into a production environment, the Group will look to adopt a presentational currency of US dollars in 2012.

Funding

Having received the final Shaimerden payment in January of $3.2 million the focus in the early part of 2011 was to finalise the financing of KRP1. The development cost of $110 million was funded through the use of the Group treasury ($60 million) with the balance being made up of two loans from Korea Zinc ($50 million). Korea Zinc agreed to lend the money by way of a $35 million long term loan and a balance of $15 million as a short term high interest loan in exchange for a 10 year offtake for the HZO product produced by KRP. At the end of the year $31.5 million of the long term loan had been drawn down, the balance being drawn in early 2012. Additionally, the $15 million loan was drawn down before the end of February 2012. Interest of £0.4 million ($0.6 million) that was charged on the long term loan in the year has been capitalised to the construction in progress account in accordance with Group policy.

The Group completed a fundraising of £6.25 million (before expenses) in December which was raised for the purpose of funding initial development of KRP2 and to enable the roll out of the technology to the USA, Turkey and Thailand as well as the ongoing working capital needs of the Group. The shares were issued at a price of 56p.This resulted in the number of shares increasing to 89.0 million (2010: 78.9 million).

Review

Contained within other gains and losses is £1 million from the disposal of scrap metal, mainly from Big River Zinc.

At the end of 2010 the Group impaired the assets of Jabal Salab and also the USA resulting in the loss of £69.3 million last year. As part of the ongoing assessment of the projects, the impairment review this year has resulted in a further impairment on the Jabal Salab spend incurred during 2011 of £3.9 million ($6.1 million) and a partial reversal of the impairment last year in relation to the intangible assets of the USA, of £0.4 million ($0.6 million). This impairment assessment has been carried out at the year end, looking at the mining and recycling sides of the business separately and in total, amounts to a charge for the year of £3.5 million (2010: £114 million).

For Jabal Salab, any spend on the project during the year was deemed critical and was therefore funded, through the continued support of our 48% Yemeni partner, in the project company. This funding support was provided by them during the year in the form of cash and by securing a loan from a local bank. In accordance with Group accounting policy, this critical expenditure was capitalised during the year, reflecting the hope that there would have been a successful outcome to financing during the year. However, the impairment review performed at the end of the year has determined that the recoverable amount, at this time, is nil and considers it appropriate to continue to make a full impairment, even of this critical expenditure, in the Group's financial statements at 31 December 2011. For clarification, after impairing the assets of Jabali at a Group level down to nil, the Group balance sheet still includes liabilities relating to Jabali, namely trade and other payables of £8.8 million ($13.6 million) and borrowings of £3.7 million ($5.7 million). These liabilities will remain outstanding until the project is refinanced.

After the fundraising in December a refundable deposit of £267k ($412k) was placed on a plot of land in Thailand which will enable the Group to work towards getting a site permitted as we have done in Turkey and USA in previous years.

Liquidity

The cash funds of the Group at 31 December 2011 were £11.9 million compared with £38.4 million at the end of 2010. These cash funds were held in a range of currencies at the year end, namely US Dollars ($4.6 million), Korean Won (KRW 3.1bn), Euro (EUR 0.8 million) and Sterling (£6.5 million).

The directors have reviewed the budgets for 2012 and the projections for 2013 developed during the planning cycle. The directors have considered a range of different scenarios, with their associated risks and uncertainties centred around modelling any delays to KRP1 ramp up and scheduling other discretionary spend, and the impact of these on the Group's cash balances. Further, the directors have assessed the future funding requirements of the Group and compared them with the levels of expected finance available for the Korean project and, based on this work, the directors are satisfied that the Group has adequate resources for at least the next twelve months from the date of signing these financial statements.

Principal risks and uncertainties

Throughout its operations, ZincOx faces various risks, both internal and external, which could have a material impact on the Group's performance.

The principal risks facing the Group in the current economic climate are those relating to the challenges of ramping KRP1 up to full production which is mitigated by employing quality employees in Korea under the supervision of ZincOx's own technical expertise. There is also the risk of delays to or inability to deliver KRP2 from both a financing and construction perspective. The process and construction risks are mitigated by employing quality contractors in Korea under the supervision of ZincOx's own technical expertise and regular monitoring through monthly steering committees. The financing risk is mitigated by maintaining and assessing as many financing options as are available before a final decision is made. Other risks include the risks of competing technologies especially regarding the opportunity for competitors to copy the KRP in other parts of the world and the reliance on the expertise of the key Group personnel. The risk of competitors is mitigated by the Group trying to sign up EAFD supply agreements, throughout the rest of the world, before our main competitors.

The ongoing risk due to the political uncertainty in Yemen and the wider Middle East, which will continue to influence the recovery of any value from the Yemen project, is being mitigated by continuous monitoring of the ongoing situation.

The volatility of the zinc price affects the availability of finance as well as the value of each of the projects within the Group. Any such declines in zinc prices will therefore have an adverse impact on the business and profitability of the Group.

The Group has exposure to various other risks connected with the uncertainties of the political, fiscal and legal systems, including taxation and currency fluctuations in the territories in which the Group operates.

Clearly, these are not the only risks that the Group will face. Some risks are not yet known and some that are not currently deemed material could later turn out to be material. All of these risks could materially affect the Group, its business, results of future operations or financial condition.

FORWARD LOOKING STATEMENTS

The Chairman's Statement, the Review of Operations and the Financial Review all contain discussion of future operations and financial performance by use of various forward looking words such as "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes" and terms of similar substance. These forward looking statements are based on management's current expectations and beliefs about future events but as with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances which could cause the Group's actual activities and results to differ materially from those contained in the forward looking statements.

ZINCOX RESOURCES PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

ZINCOX RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011

ZINCOX RESOURCES PLC

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2011

ZINCOX RESOURCES PLC

 CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2011

ZINCOX RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE

YEAR ENDED 31 DECEMBER 2011

Notes:

1. Preparation of non-statutory accounts

The financial information set out in this final results announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.

The consolidated balance sheet as at 31 December 2011 and the consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement, consolidated statement of changes in shareholders' equity and associated notes for the year then ended have been extracted from the Group's 2011 statutory financial statements upon which the auditors' opinion is unqualified, and does not include any statement under Section 498 (2) or (3) of the Companies Act 2006.

2. Loss per Share

The calculation of the loss per share is based on the loss attributable to ordinary shareholders of £6,073,000 (2010: £69,323,000) divided by the weighted average number of shares in issue during the year of 78,686,207 (2010:77,860,620).

There is no dilutive effect of the share options in issue during 2011 and 2010.

3. Borrowings

An unsecured loan was taken out with the International Bank of Yemen by Jabal Salab Company (Yemen) Ltd on 12 March 2011. The facility is for $5.5m at an interest rate of 6% and was initially repayable on 31 October 2011. This facility has been extended into 2012, but will remain outstanding until the project is refinanced (see Financial Review on page 7).

Two separate loans were taken out with Korea Zinc Company Limited ("Korea Zinc") by ZincOx (Korea) Ltd to provide $50m of the required $110m funding for the development of KRP1 in Korea. A long term 'Offtake Loan' was agreed for $35m and is repayable on 30 June 2022. Interest is chargeable at USD 6 month LIBOR plus a 5% margin and becomes payable from June 2013, two years from first drawdown. A shorter term 'Development Loan' was agreed for $15m and is repayable three years from first drawdown being February 2015. Interest is chargeable at 15% and becomes payable immediately from first drawdown in line with the agreed interest periods. Both loans with Korea Zinc are secured by a debenture over the assets of KRP1 only.

Other bank borrowings represent two unsecured facilities taken out by ZincOx Resources Belgium sprl to fund short-term working capital requirements.

The table below details the Group's borrowings as per the consolidated balance sheet.

4. Property, Plant & Equipment

An amount of £538k (2010: £539k, 2009: £432k), representing capitalised depreciation, is included within the property, plant and equipment additions (Construction in Progress) for the year.

The Construction in Progress amounts shown above also include capitalised interest during the construction period as follows:

·; Interest paid and payable on borrowings of £0.4m (2010: £nil, 2009: £18.7m).

·; Interest received on the investment of above borrowings £46k (2010: £nil, 2009: $3.1m).

The property, plant and equipment assets relating to the Jabali project were fully impaired at the end of 2010 due to the uncertainties which existed surrounding the political situation in Yemen and the effect that this had on the ability to refinance the project in a timely way. The situation throughout 2011 and at the year end has not changed in either respect. A further impairment of £4.0m ($6.1m) relating to the ongoing holding cost in Yemen, that had been capitalised on the project, was made in the year and has been charged to the profit and loss in arriving at the operating loss.

5. Post Balance Sheet Events

On 18 January 2012, the Company granted 1,885,814 options over its ordinary shares at a subscription price of 56 pence per ordinary share and issued a further 788,021 options under its Performance Share Plan at a zero subscription price. At the same time, the Company cancelled 1,029,500 options over its ordinary shares that had been granted in 2009.

By the end of January 2012, ZincOx (Korea) Ltd had drawn down the remaining amount ($3.5m) from the original $35m Offtake Loan facility and by the end of February 2012 the whole of the $15m Development Loan facility had been utilised.

On 30 April 2012, a start-up permit was granted to ZincOx (Korea) Ltd, allowing it to receive EAFD on site. Prior to receiving this permit, ZincOx (Korea) Limited was not able to start production.

6. Annual Report

Copies of the Annual Report will be sent to shareholders by 1 June 2012 and may be viewed on the Company's website www.zincox.com. The Annual Report will be available from the Company at Knightway House, Park Street, Bagshot, Surrey GU19 5AQ and from Peel Hunt.

7. Annual General Meeting

The Annual General Meeting of the Company will be held at 12.30pm on 26 June 2012 at the offices of Peel Hunt, Moor House, 120 London Wall, London EC2Y 5ET.