Final Results

2 May 2013

ZincOx Resources plc

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

Final Results for the

year ended 31 December 2012

ZincOx Resources plc (AIM: ZOX) the developer of Asia's largest zinc recycling project, today announces its results for the year ended 31 December 2012.

Highlights

·; Production commenced - Korean Recycling Plant now close to target throughput

·; US$9.9m (excluding costs) raised through equity placing in November

·; Joint Venture in Russia with Ural-Recycling LLC

·; Project site in Thailand secured

·; Interest in Jabali project sold

Commenting today Andrew Woollett, Executive Chairman, said:

"The Korean Recycling Plant has demonstrated the new technology and we are now concentrating on optimisation of the plant so as to maximise throughput and efficiency. The company is now a producer with a world beating technology that we will roll out globally"

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

ZINCOX RESOURCES PLC

ANNUAL REPORT 2012

CHAIRMAN'S STATEMENT

After several years of research and the successful development of the first phase of the Korean Recycling Plant ("KRP1"), 2012 saw the Company transformed into a zinc "producer". KRP1 has almost ramped up to full targeted capacity and we are looking forward to it generating a significant positive cashflow before the end of the current year.

KRP1 has had to overcome numerous challenges which have resulted in its ramp up taking much longer than planned. The delay has been extremely frustrating for management, employees and shareholders alike. The challenges have now been almost entirely overcome and the plant is currently running close to target throughput; but the poor mechanical reliability and reduced recovery have limited the production of zinc concentrate. We are now optimising zinc recovery, increasing iron product quality and reducing operating costs so that we may achieve constant profitable targeted production. While some operating parameters will not be confirmed until we are in full steady production, the majority are well known and in line with our pre-development expectations.

As in all start-ups of plants of this size and complexity, throughput is increased in steps which gradually test the various pieces of equipment. At each step we encountered many more mechanical issues than we had expected, frequently involving standard equipment. In several cases this was due either to the very abrasive and sticky properties of the feed or the corrosive nature of material in the process. With the exception of the heat exchangers, where there are still some corrosion issues, the plant, including the hot briquetting of our iron product, is now working well and in almost all cases, problems were overcome without purchasing new equipment. Our initial capacity for the first year of the plant's operation was targeted at 175,000 tonnes of Electric Arc Furnace Dust ("EAFD") per annum ("tpa"), with the intention of reaching full nameplate capacity, 200,000 tpa, twelve months thereafter, following ongoing fine tuning and debottlenecking of the process. We still hope to achieve this target at the end of 2013.

A comprehensive process review has recently been undertaken that has led to a number of actions which are expected to improve recovery and throughput over the next few months. As part of this study, recent testwork has demonstrated that we are able to use a significantly larger briquette than is currently the case. This will improve the distribution on the rotary hearth, greatly facilitating its operation. KRP1 can produce the larger briquette without major modifications to the existing equipment while still giving the same high zinc recovery. New briquetting segments with larger moulds are currently being evaluated.

The safety of our staff remains at the forefront of our operating philosophy. As a result of the innovative nature of our plant and the risks involved with any high temperature process, we have carried out an intensive programme to promote a strong safety culture and this has meant that we have avoided any lost time incidents at KRP.

The delay in making the hot briquetting circuit work as designed has meant that the production of the iron product (ZHBI), of the planned quality has been significantly delayed and commercial test marketing has only recently commenced. By contrast, the quality of the zinc product, which is likely to account for over 90% of the revenue, has continued to exceed expectations and it has all been sold to Korea Zinc. Indeed the high quality has led us to investigate if the Halide Zinc Oxide ("HZO") could be simply upgraded to a commercial grade zinc oxide chemical. Having examined a number of options, we have recently demonstrated a process at the laboratory scale that has produced samples that have been shown to be equivalent to material being used in the ceramics and rubber industries, the two largest markets for zinc oxide. The value of zinc units in a commercial oxide are about twice as valuable as those in a concentrate, so that there would be potential to add considerable value using this process and a preliminary evaluation of the economics looks very encouraging.

The individual pieces of equipment in the plant are well proven, but its treatment of EAFD has not been done before. A year ago there were several critical elements of the plant and process that were not proven for the treatment of EAFD and which we have now demonstrated. While the Board is not satisfied with the rate of ramp-up, it has been more critical to have demonstrated the success of the technology as this will be the core of our business moving forward as we roll out the process worldwide. Over the past year we have travelled up a steep learning curve and the Company has made huge advances in the understanding of this technology.

Notwithstanding a marked swing in exchange rates that effectively increased the cost of construction by US$5 million, the final cost of the project was about US$112 million, just US$2 million over the original budget. Unfortunately, the delays in ramp up have added significantly to our costs during 2012, and at the same time precluded the project contributing positive cashflow. This has resulted in the Group now reporting a loss for the year attributable to shareholders of US$9.4 million (2011: loss of US$9.8 million).

The shortfall in revenue generation from KRP1 and the extra cost of the slower ramp up, led the Company to raise US$9.9 million in November 2012. Additionally, in April 2013, the Company put in place a working capital facility with Standard Chartered Bank Korea Ltd for up to US$5 million, which the Group intends to utilise to maintain liquidity as discussed in the Financial Review.

In October 2012 the Company was presented with a Commendation Award by the South Korean Minister of Knowledge Economy. In addition to high level government support, we continue to enjoy the strong support of the provincial and local government and local community, for which we are very grateful. The Company has also recently been shortlisted, by an independent panel of judges for Platts Global Metals, for the Industry Leadership Award - Scrap & Recycling.

We believe that the demonstration of the technology at KRP1 gives a business model that can be rolled out around the world and which can transform ZincOx into a major zinc recycling company. We have a significant technology lead over potential competitors in the field of zinc recovery in the rotary hearth furnace and we must not let our focus on KRP1 squander this advantage. So while the focus of almost all our staff is directed towards reaching full production at KRP1, we have also carried out work on its expansion phase, KRP2, and projects elsewhere in the world.

A considerable amount of design work has been undertaken on KRP2, taking into account the lessons learned from the development and operation of KRP1. This has led to several parts of the plant having a simpler and less costly design. The revised design will be a model for similar developments not just in Korea but elsewhere in the world, where we are adopting a strategy that envisages using an optimised plant of one size for all locations. A study on the cost of developing KRP2 is underway and will only be finalised once all the design modifications resulting from the experiences at KRP1 have been incorporated, an exercise that is still ongoing. The latest capital cost estimate for KRP2 amounts to US$107 million.

The construction of KRP2 will, however, have to await full targeted production at KRP1 and financing. The latter is likely to involve Standard Chartered Bank ("SCB"), which in July 2012 was mandated to arrange project finance for the expansion. Draw down of project finance will require the successful operation of KRP1 over a three month test period ("Performance Test") which has yet to commence and is subject to satisfactory due diligence and Bank credit approval typical for a project of this nature. We hope this will begin within the next couple of months.

Elsewhere in the world, we are making progress with projects in Thailand and Turkey where we have been active for some years, and more recently in Russia.

In Thailand, we have secured a plot of land in an industrial estate at the centre of the Thai scrap recycling industry. Although Thailand has one of the largest scrap recycling industries in the region, it does not generate sufficient EAFD to fill a plant of the optimised capacity. Since we can only operate efficiently with a plant of a certain capacity, our vision is to create in Thailand a recycling facility for the whole of the South East Asian region. The site is also close to Laem Chabang, Thailand's largest container port, so as to facilitate the importation of EAFD. Discussions concerning long term supply agreements are underway with Thai and other regional steel mills.

In Turkey, a reorganisation of the land in the Aliaga Heavy Industrial Zone has allocated to us a new and more suitable plot which sits only three kilometres from steel mills together generating over 120,000 tonnes of EAFD per annum. These steel mills account for about one third of the total Turkish EAFD production. This reorganisation is expected to be completed shortly, at which point we can begin to re-engage with the mills in the region, with a view to signing long term supply agreements.

Last year we were approached by Magnezit to form a joint venture to investigate the joint development of an EAFD treatment plant in Russia, to serve the Commonwealth of Independent States. Magnezit is one of the world's largest producers of refractory bricks, used extensively in steel making. Magnezit has excellent relationships with all Russia's major steel producers and could see that increasing government pressure for industry to adopt better practices would reduce indiscriminate landfilling of EAFD and potentially create an opportunity for its treatment. They reviewed a number of technologies and decided the ZincOx approach offered the most sustainable technology. A joint venture agreement, between Ural-Recycling, a wholly owned subsidiary of Magnezit Group and ZincOx 49%:51% respectively, has been entered into and a review of EAFD generation and its sampling to establish zinc and iron grade is underway.

Over the past five years, there has been significant additional EAFD recycling capacity brought on stream in the USA. These developments mean that it will be difficult to obtain long term EAFD supply agreements and for this reason our plans for the development of a plant in the USA are assuming lower priority. The future of our interest in the Big River Zinc Smelter, where we had intended to wash HZO is being reviewed and we are looking at the possibility of using it as a site for upgrading HZO to a chemical quality product.

When ZincOx was established, it was to develop unconventional zinc resources, that is to say non-sulphide sources. Initially, the Company was exclusively focused on natural resources but over time it has moved entirely towards recycling, which now forms the only business of the Company. In March 2013, the final ties with our mining past were cut when our interest in the Jabali deposit in Yemen, was sold. Our efforts to re-finance the development of this deposit had been unsuccessful and we decided to sell to our Yemeni partners who are best placed to arrange development financing. In order not to burden their efforts to develop the depositwith a large upfront payment, it was decided to adopt a structure similar to that successfully used for our disposal of the Shaimerden deposit in Kazakhstan, consisting of a series of deferred payments from cash generated once development is complete.

Following the comprehensive process review, the debottlenecking and operational improvements continue and remain the key focus as we look forward to achieving full production. As soon as the production at KRP1 has settled at target throughput we will be carrying out a review of the operating costs, which save for gas and maintenance costs are currently in line with expectation, so we can update the anticipated project EBITDA (earnings per annum, before interest, tax, depreciation and amortisation) as previously announced in May 2012.

It has been a very hard and frequently frustrating year for all of ZincOx's stakeholders. I would like to thank our employees who have worked so hard to get KRP1 up and running, the Board and loyal shareholders for their support over the past year and we are now looking forward to establishing KRP1 as the foundation stone on which we can build a strong and profitable global recycling business.

Andrew Woollett

Chairman

1 May 2013

REVIEW OF OPERATIONS

RECYCLING OPERATIONS

Korea, Korean Recycling Plant ("KRP")

The construction of KRP1 was completed in April 2012 and the first zinc concentrate was sold to Korea Zinc in May 2012. The process has now been successfully demonstrated and production continues to ramp up. As with most new processes the required time to ramp up to full production has been longer than predicted but during the last year steady progress has been made both with throughput and the reliability of the plant.

The hot briquetting circuit of the plant has proven to be problematic and numerous improvements have been necessary. The iron product (ZHBI) has only recently been produced on a regular basis and representative samples are now being circulated to potential customers for commercial trials.

The KRP1 and KRP2 together have been designed to treat 400,000 tpa of EAFD. The EAFD is being supplied by all of Korea's steel recycling companies under ten year supply agreements. A number of sampling campaigns over the past five years have demonstrated that the EAFD contains about 23% zinc and 28% iron.

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 is purchasing all the zinc concentrate, at market rates, produced from KRP1. Zinc concentrate produced by KRP2 is not subject to these agreements.

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 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.

KRP is being developed in two equal phases. Having completed KRP1, it is intended that the development of KRP2 will commence as soon as KRP1 is optimised. The financing of KRP2 is on hold pending the Performance Test on KRP1 and the satisfactory due diligence and Bank credit approvals required by SCB. 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 engineering company, was responsible for the construction of KRP1 and has been retained for the development of KRP2. During 2012 Xmetech undertook a costing study for KRP2 that took into account several design changes required as a result of operating experience from KRP1, although further improvements may still be incorporated in a final design. This study estimated the capital cost to be US$107 million and a schedule for the development of about 16 months.

The KRP site covers 9.2 hectares in the Cheonbuk Industrial Complex, which lies about ten 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.

RECYCLING DEVELOPMENTS

Thailand, South East Asia Recycling Project ("SEARP")

ZincOx has been active in Thailand for several years, and the Company has plans for a plant similar in size to KRP1. About half the EAFD required for the recycling plant will be sourced from Thailand itself with the remainder coming from other countries in South East Asia and elsewhere in the region. Thailand will therefore become a regional hub for recycling. The concept of turning Thailand into a hub for the rest of the region is something which the Thai government is keen to promote in the run up to the creation of the ASEAN Economic Community in 2015.

Over the past twelve months we have hosted visits to KRP by representatives from various Thai government agencies, from a number of Thai steel companies and from steel companies based in other countries which could supply EAFD to SEARP.

Draft long term EAFD supply agreements have now been circulated to the major Electric Arc Furnace ("EAF") operators in Thailand. We are also awaiting the grant of a land use permit on the five hectare site we have secured on the Amata City Industrial Estate. Amata City is one of the major industrial estates in Thailand and is in an ideal location (about 80% of Thailand's EAF capacity is within 40km of our site) and Laem Chabang, Thailand's major container port, is less than 30km away. Securing a critical volume of EAFD from Thai mills and securing our land use permit are the two major requirements before we can proceed with basic engineering, costing and the production of a full feasibility study that will enable us to raise project finance.

In parallel with this we are continuing negotiations with steel mills elsewhere in the region which might also supply SEARP. Our focus is on countries which do not themselves generate sufficient dust to justify their own domestic recycling plant and where current EAFD disposal costs are high enough to justify the additional costs of shipping EAFD to Thailand.

Turkey, Aliaga Recycling Project

The Company has been active for many years in Turkey, where it acquired adjacent sites amounting to 6.4 hectares in the Aliaga Heavy Industrial Zone ("AHIZ"), near Izmir. As a result of a rationalisation of land in the AHIZ the plots have been combined into a single rectangular site that will better lend itself to plant development. 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 AHIZ is a major centre of steel production and about 120,000 tonnes of EAFD is produced there annually. Environmental permitting on the new site 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.

Russia, Russian Recycling Project

In October 2012 the Company entered into a Joint Venture Agreement ("JV") with Ural-Recycling LLC, a wholly owned subsidiary of Magnezit Group Limited ("Magnezit"). The JV covers the first phase of a programme to establish a waste dust recycling facility in Russia.

Magnezit is a major supplier of refractory products and thermo insulating materials with an annual production in excess of 1.5 million tonnes of high quality refractory products. As part of its continuing commitment to expand its provision of services to the steel industry, it undertook a detailed evaluation of various EAFD processing technologies and visited KRP. Magnezit concluded that the technology employed by ZincOx presented the most economically attractive and environmentally sustainable treatment process.

The JV provides for an ownership participation of 51%:49% ZincOx:Ural-Recycling respectively, with Ural-Recycling as the operator. ZincOx will provide testwork and the knowhow of the Rotary Hearth Furnace ("RHF") technology, plant design and commissioning and technical support. The JV will cover all Russia and the Commonwealth of Independent States.

The JV envisages the preparation of a feasibility study over the course of the next two years so that during 2015 the project could be ready for the commencement of construction. The current programme of work involves the accurate assessment of the grade and tonnage of EAFD being generated by each mill in the region. The JV is in its early stages and, as at 31 December 2012, there had been no expenditure incurred by ZincOx.

There has been a rapid growth in the recycling of steel in the region in recent years and the total amount of EAFD generated in Russia alone is estimated to be well over 200,000 tonnes per annum, a figure that is expected to continue to grow for the foreseeable future.

USA, Ohio Recycling Project ("ORP")

Before it was decided to make the KRP the Company's first development project, considerable work had been undertaken on the 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 RHF process, with its superior environmental characteristics, 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 pa 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 international recycling plants. BRZ has excellent infrastructure and rail connections and therefore is well suited to act as a storage and distribution centre in the Mid-West; it currently provides facilities to third parties distributing sulphuric acid and diesel emission fluid. The Company continues to look for other opportunities to utilise the assets at BRZ.

MINING

Jabali Zinc and Silver Mine

The exploitation and development rights to the Jabali zinc deposit are owned by Jabal Salab Company ("Jabal Salab"), in which ZincOx held a 52% interest at the year end. In 2010 due to the political situation in the Middle East the Company fully impaired its interest in the project. During 2012, our Yemeni partner, who had been continuing to fund the project for any day to day spend, took over the management of the day to day operations and therefore produced a shift in the control of Jabal Salab away from the Group. This resulted in a one-off accounting gain of US$10.5 million as the project was subsequently deconsolidated from the accounts.

In March 2013, the Company announced that it had entered into an agreement for the sale of the entire issued share capital of ZincOx Resources (Yemen) Limited, which holds the 52% interest in Jabal Salab to its JV partner, Ansan Wikfs (Jabal Salab) Ltd ("Ansan"). Ansan have very strong connections in the Middle East generally and Yemen in particular and are best placed to pursue the financing of the project.

Jabal Salab has the right to exploit the Jabali deposit in Yemen, which contains both silver and zinc, and the consideration for the sale comprised a series of deferred payments to be made from cash generated from the (currently undeveloped) Jabali deposit, once it has been developed, with a nominal payment of US$1 made by Ansan at signing, acknowledging that the value will be in the project once developed. The structure is similar to the one that ZincOx successfully employed in respect of the sale of its interest in the Shaimerden deposit in 2003.

The continuity for the technical support of the metallurgical process to be used in the project is maintained under a Licence Agreement and a Consultancy Services Agreement, whereby ZincOx's technical team are available to provide process and other engineering support to ensure successful commercialisation.

The deferred payments are totally dependent on the project being financed and developed and the products being sold. They are further dependent on the LME zinc and silver prices at the time of future sales of the products and are designed to recover the Company's past investments in Jabal Salab.

FINANCIAL REVIEW

Results Overview

ZincOx now presents its first full year results in US Dollars, following a review of what the most appropriate presentational currency should be. This review was prompted by the start of production at our Korean recycling facility during the year and the fact that the Group will predominantly receive any future revenues in US Dollars.

The result for the year attributable to shareholders of the parent company was a loss of US$9.4 million compared to a loss of US$9.8 million (£6.1 million) last year.

In the year the method of accounting for Jabal Salab was changed from a fully consolidated subsidiary to equity accounting following a loss of management control over the entity. This led to an exceptional gain in the accounts of US$10.5 million. This gain was a result of a deconsolidation of the liabilities of Jabal Salab and any non-controlling interest in the previously held subsidiary as shown in the table below.

The Group has an underlying operating loss of US$17.7 million compared to an underlying loss of US$8.9 million (£5.6 million) in 2011. Administrative costs deducted in arriving at the underlying operating loss in the year amount to US$10.0 million (2011: US$8.6 million / £5.3 million). In addition, a foreign exchange gain of US$3.2 million (2011: loss of US$1.5 million / £0.9 million) has also been included in arriving at the underlying operating loss.

Review of KRP1 Operation

KRP1 made its first sale of commercial product at the end of May 2012, and this was sold to Korea Zinc under the ten year offtake agreement that was signed with them as part of the financing of the project. In the first half of the year 724 tonnes of HZO, with a value of US$465k, were invoiced to Korea Zinc. During the second half, sales improved with 12,778 tonnes of HZO sold for a value of US$9.3 million.

The product sold by KRP1 is a zinc oxide concentrate sold under an international formula and as a result, the monthly revenues are very dependent on the LME zinc price. Since going into production the LME zinc price has averaged US$1,946 per tonne, with a maximum over the same period of US$2,104 per tonne and a minimum of US$1,759 per tonne.

The sales of zinc concentrate are made in US Dollars and the majority of costs incurred at KRP are incurred in KRW, the high point for this exchange rate in the year was 1,205 KRW per USD and the low point was 1,067 KRW per USD with an average for the year of 1,130 KRW per USD.

The plant has been continuing to ramp up since the first production in May 2012 and has processed approximately 42,000 tonnes of EAFD in the year. The impact of running the KRP1 plant at below nominal capacity is that certain operating parameters are not yet at the budget level which has resulted in an EBITDA loss of approximately US$9 million relating to KRP1 during the year.

Remediation and maintenance costs of US$2.6 million, associated with the ramp up, have been charged to cost of sales during the year.

A depreciation charge of US$3.5 million (2011: US$ nil) has been included in cost of sales, following the start of operation, in arriving at the result for the year.

It should be noted that the tax holiday privileges that were obtained for KRP1 will commence in the first profitable year of operation in Korea.

Financing of KRP2

In advance of KRP2, the Group finalised a mandate with SCB during July 2012 for the financing of KRP2. This mandate is intended to be part of an overall financing package for KRP2, the precise value of the project finance will be finalised after due diligence and Bank credit approvals. Part of the condition of the mandate is that KRP1 is subject to a Performance Test to demonstrate that the plant is performing consistently and producing regular cashflows. This Performance Test had not commenced at the year end. It has been arranged that the Performance Test can commence within 24 hours following a request from ZincOx.

Review of Jabal Salab and the Jabali Project

The Group lost control of Jabal Salab at the end of May 2012 following a shift in the management and control of the project away from the Group. Since May 2012, our Yemeni partner has continued to fund the project for any critical spend and has taken over the management of the day to day operations. Any critical expenditure up to 31 May 2012 has been capitalised by the Group in the year and subsequently impaired, which is consistent with our Group accounting policy.

As a result, Jabal Salab no longer qualifies as a subsidiary undertaking within the Group but has been reclassified as an associate undertaking with effect from 31 May 2012 and later to an asset held for sale. The Group is therefore no longer required to fully consolidate the assets, liabilities profits and losses of Jabal Salab into its financial results. This has given rise to the one off accounting gain in the Group financial statements of US$10.5 million for the year.

Since the end of the year, Jabal Salab has been sold to our Yemeni partner on 11 March 2013, as a result of which ZincOx will be eligible for payments when the project goes into production and provided the zinc and silver prices are above certain thresholds (see note 6).

Review of Other Projects

At the end of 2012 the Group is showing 'assets held for sale' with a net realisable value of US$3.1 million. This relates to land held in Turkey (US$2.4 million) and property, plant and equipment relating to the Rubber Grade Plant ("RGP") at Pearl Zinc SA in Belgium (US$0.7 million).

Following a rationalisation of the land which ZincOx has purchased in Turkey, the plot of land outside the heavy industrial zone which ZincOx purchased in 2006 and no longer required for development of the project has been split into smaller plots to facilitate sales. These plots have been marketed over the last year or so and this has resulted in the sale of 17 of the plots by the end of 2012 generating total cash of US$1.6 million (YTL 2.8 million) and a total profit of US$0.9 million (YTL 1.5 million). The profit generated in the year to 31 December 2012 was US$0.4 million / YTL 0.7 million (2011: US$0.5 million / YTL 0.8 million) and is shown in other gains and losses in the Group income statement. The cash received for these sales has been added to the Group treasury. In view of the uncertainty over the expected receipts for the remaining 40 plots, the historic cost of US$2.4 million (YTL 4.3 million) has been applied as being the lower of fair value less cost to sell.

The remaining property, plant and equipment, following the sale of the RGP building in Pearl Zinc SA, has also been reclassified as an asset held for sale. The RGP building itself was sold for US$2.6 million (EUR 2.0 million) in December 2012.

Other gains and losses of US$3.2 million comprise the profit generated from the sale of Turkish land (US$0.4 million) and profits generated from the disposal of various small items of property plant and equipment including scrap metal from Big River Zinc (US$2.8 million).

Funding

KRP1 has been developed through equity from the Group and two external loans from Korea Zinc. At the end of 2011, the Korea Zinc Offtake Loan of US$35 million had been partially drawn up to US$31.5 million. By the end of February 2012, the Group had drawn down the full value of this loan and had also drawn down the full amount of US$15 million from the Development Loan taken out with Korea Zinc.

Interest charges on the US$35 million Offtake Loan are rolled up into the principal amount for the first two years of the loan but interest charges on the Development Loan are payable half yearly from the outset. The first payment of interest was made in August 2012 for US$1.125 million.

Interest on both Korea Zinc loans was capitalised up to May 2012 to the construction in progress account, when the plant was ready for use, in accordance with Group policy. Since 31 May 2012, interest of US$1.9 million for both Korea Zinc loans has been charged to the Group income statement. At 31 December 2012 the Offtake Loan balance including rolled up interest was US$37 million (2011: US$32 million including rolled up interest) and the Development Loan balance US$15 million (2011: US$ nil).

The Group completed a fundraising of US$9.9 million (£6.2 million) after expenses in November 2012, which was raised for the purpose of funding additional working capital in the Group as well as allowing limited spend on other projects and funding final construction payments relating to KRP1. The shares were issued at a price of 45p. This resulted in the number of issued shares increasing to 103 million (2011: 89 million).

Liquidity

The cash funds of the Group at 31 December 2012 were US$10.6 million (2011: US$18.4 million). These cash funds were held in a range of currencies at the year end the most significant of which were US Dollars (US$2.1 million), Turkish Lira (YTL1.1 million), Euro (EUR2.6 million) and Sterling (£2.7 million).

In considering the budgets and projections for 2013, which have been developed during the planning cycle, the directors have considered a range of different scenarios. These scenarios are centred on the financial modelling of various ramp up scenarios for KRP1 including sensitivity to the zinc price, zinc grades and recovery. Other discretionary spend has also been scrutinised and scheduled accordingly in this important period where the continuing ramp up of KRP1 is the critical factor in the future success of the Group. Further, the directors have assessed the future funding requirements of the Group and compared them with the levels of expected finance available 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

Set out below are principal risks and uncertainties which may affect performance. Such risks and uncertainties are not intended to be presented in any order of priority. Although the directors and senior management have significant experience and take steps continually to mitigate and review risks as far as possible and reasonably practicable, any of the risks set out below, as well as any other risks and uncertainties referred to in this annual report, could have a material adverse effect on business performance. In addition, the internal and external risks set out below are not exhaustive and additional risks and uncertainties, not presently known to the directors, or which the directors currently deem immaterial, may arise or become material in the future.

Operational risks

·; Continuing remediation programme at KRP1 leading to delays in ramping up to full production,

·; Failure of equipment or third party services,

·; Environmental incidents,

·; Health and Safety incidents,

·; Single project dependence, and

·; Loss of key personnel.

Financial risks

·; Zinc price movements and its associated volatility will affect the monthly profitability of KRP, as well as the amount of finance available for the development of other projects within the Group. Any decline in zinc prices will therefore have an adverse impact on the business. No hedging is currently undertaken to mitigate this risk,

·; Impact of any loss of production at KRP on timing of cash receipts and payments and how this will impact on generating surplus cash to fund the Group,

·; Foreign exchange movements, notably between US Dollars and Korean Won (KRW) has a particular effect on the Group's result as the revenues are received in US Dollars (matching the borrowings of the Group) and the critical costs at KRP are in KRW. This is continuously monitored and no hedging is currently undertaken to mitigate this risk,

·; Cost inflation, and

·; Insurances may not cover all liabilities.

Strategic and other external risks

·; Material fall in zinc price,

·; Dependence on the EAFD supply contracts, which is why the Group is aiming to sign up EAFD agreements with target territories for expansion,

·; Availability of finalised finance package to fund KRP2 development in Korea,

·; Availability of capital to fund other recycling projects,

·; Competitors signing up EAFD supply agreements in the other targeted territories, and

·; Competing technology especially in respect of competitors copying KRP2 in other parts of the world.

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. There is currently a political risk associated with the ongoing tension between North Korea and the surrounding region.

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 2012

# the adjusted loss per share calculation excludes the one-off gain in the period of US$10,463,000 following the loss of control of Jabal Salab at 31 May 2012 and its subsequent deconsolidation from these financial statements.

ZINCOX RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

ZINCOX RESOURCES PLC

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2012

ZINCOX RESOURCES PLC

 CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

ZINCOX RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE

YEAR ENDED 31 DECEMBER 2012

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 2012 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 2012 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. Significant accounting policies

The accounting policies and presentation followed in the preparation of these final results have been consistently applied to all periods in these financial statements and are the same as those applied by the Group in the preparation of its Annual Report for the year ended 31 December 2011. The one exception to this is that the presentational currency of the Group has changed from Pounds Sterling to US Dollars. This is discussed in more detail in note 3 below.

3. Change in presentational currency

Following the commissioning and start of production at KRP1, the directors reviewed the Group's activities to determine an appropriate reporting currency for the Group.

Notwithstanding that the Group continues to be managed from the UK, the directors recognise that its current and future operations will be overseas. In addition, the Group will receive sales revenues predominantly in US Dollars. For this reason, the directors have decided that the Group should now report its financial results in US Dollars and has opted to change its presentational currency from Pounds Sterling to US Dollars with effect from 1 January 2012.

The Group has applied the principles of IAS 21 'The Effects of Changes in Foreign Exchange Rates' in preparing these financial statements and has applied them to all periods in these financial statements.

The Group has elected to translate its income statement at average exchange rates for the period and to translate its assets and liabilities at period end exchange rates. Share capital and share premium reserves have been translated at historic exchange rates with any differences between the historic rates and the period end rates being charged to the foreign exchange translation reserve.

The amounts in the financial statements and accompanying notes for the current year have been translated at 1.61862 US$/£ year end rate where they relate to the consolidated balance sheet and at 1.58758 US$/£ average rate for the year where they relate to the consolidated income statement. The comparative amounts in the financial statements and accompanying notes for 2011 have been translated at 1.54531 US$/£ year end rate where they relate to the consolidated balance sheet (2010: 1.54679 US$/£) and at 1.60793 US$/£ average rate for the year where they relate to the consolidated income statement (2010; 1.54853 US$/£).

The biggest impact on the re-presented US Dollar statements has been on the valuations of the share capital reserve, the share premium reserve, the retained losses reserve and the foreign exchange translation reserve. Capital has been raised in the past at an average historic exchange rate of US$1.84/£ compared to a current exchange rate of US$1.61862/£. Furthermore, the retained losses reserve has now been translated at average historic exchange rates rather than period end rates as was previously the case.

4. Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future, which by definition will seldom result in actual results that match the accounting estimate. The estimates and assumptions that have a significant risk of causing material adjustments to the carrying amount of assets and liabilities within the next financial year are discussed below:

a) Impairment Reviews

In accordance with the accounting policy stated above, the Group performs an assessment of the recoverability of intangible assets to see whether any of the exploration or pre-development projects have suffered impairment. This assessment is dependent on the future viability of the relevant products and processes and the methodology followed in order to assess the recoverable amount of an individual cash-generating project is to consider a cash flow model over 20 years or the life of the plant, whichever is shorter, and with appropriate assumptions for zinc price, operating and capital development costs. In performing any cash flow analysis the Group uses risk adjusted discount rates based on support from third parties.

The Group also performs impairment tests on assets under the course of development by estimating the recoverable amount of the cash-generating project to which it has been allocated. This recoverable amount is estimated by either discounting future cashflows (value in use) or by considering the fair value less costs to sell of the assets. It should be noted that, where discounting is used, the zinc price and the discount rate have the most significant impact on the value in use calculations.

Previously, Jabal Salab has continued to pay for all critical expenditure that is required to maintain the project in Yemen. The funds for these payments have been provided by our JV partner in the Yemen project and until the point of loss of control these amounts were capitalised as construction in progress. The review of the future value of this spend at the year end has resulted in an impairment of US$1.7 million (2011: US$6.1 million) to reduce the carrying value of the project to US$ nil, reflecting the continued uncertainty over the timing of when it will be possible to finalise the financing of the project in Yemen. This impairment was made against property, plant and equipment when the costs were capitalised. Since the year end, the Group has sold its interest in Jabal Salab to its JV partner in the Yemen project (see note 6).

A further impairment of US$0.4 million, against a receivable with Jabal Salab, from 1 June 2012 was made at the year end.

The table below summarises the impairment provisions made in the year and included in the Group income statement.

b) Share Based Compensation

In order to calculate the charge for share based compensation as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its option-pricing model. The charge made in the year is US$219k (2011: US$236k).

(c) Going Concern

As stated in the Financial Review, the directors have reviewed future forecasts and commitments, which when compared to the current cash available, lead the directors to have reasonable expectation that the Group has adequate financial resources to continue in operational existence for the next twelve months. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements.

5. Loss per Share

The calculation of the loss per share is based on the loss attributable to ordinary shareholders of US$9,406k (2011: US$9,765k) divided by the weighted average number of shares in issue during the year of 90,634,426 (2011:78,686,207).

An adjusted loss per ordinary share for the year has been presented to exclude the gain of US$10,463,000 on the loss of control of Jabal Salab at 31 May 2012. It has been calculated based on adjusted loss attributable to ordinary shareholders of US$19,869,000 divided by the weighted average number of shares in issue during the year of 90,634,426.

There is no dilutive effect of the share options in issue during 2012 and 2011.

6. Post Balance Sheet Events

On 23 January 2013, the Company granted 4,000,003 options over its ordinary shares at a subscription price of 45 pence per ordinary share and issued a further 2,049,997 options under its Performance Share Plan at a zero subscription price. At the same time, the Company cancelled all 1,816,078 outstanding options over its ordinary shares that had been granted in 2010, 2011 and 2012.

In March 2013 the Company sold ZincOx Resources (Yemen) Ltd, a subsidiary undertaking which holds a 52% interest in Jabal Salab Company (Yemen) Ltd, to its JV partner, Ansan Wikfs (Jabal Salab) Ltd for a nominal consideration of US$1 with a series of potential deferred payments as and when the Jabali deposit is fully developed.

In April 2013, ZincOx (Korea) Ltd finalised a working capital facility of up to US$5 million (against monthly trade receivables) with Standard Chartered Bank Korea Ltd.

7. Assets held for Sale

Mining

Following a loss of control of Jabal Salab at the end of May 2012 and the subsequent reclassification from a subsidiary undertaking to an associate undertaking, the retained investment in the project was moved to assets held for sale and marked down to the impaired value of US$ nil at the year end. Jabal Salab was subsequently sold to our Yemeni partner in March 2013. The retained interest in Jabal Salab falls under the Group's mining segment activity within the geographical region of the Yemen.

Recycling

ZincOx owns a plot of land outside the heavy industrial zone in Aliaga, Turkey which was purchased in 2006 and is no longer required for development of that project. It has been split into smaller plots to facilitate its sale. These plots have been marketed over the last year or so and this has resulted in the sale of 17 of the plots by the end of 2012. In view of the uncertainty over the expected receipts for the remaining 40 plots, the historic cost of US$2.4 million (YTL 4.3 million) has been applied as the realisable value.

As a result of the decision to sell the Group's mining assets in Yemen, the Group took the opportunity to dispose of the Rubber Grade Plant ("RGP") facility in Belgium. This resulted in the sale of the RGP building in December 2012 with the remaining property, plant and equipment relating to the RGP now classified as assets held for sale. The carrying value of these assets has been marked down to a fair value of US$0.7 million (EUR 0.5 million).

The Turkish land and the remaining property, plant and equipment at Pearl Zinc SA form part of the Group's recycling segment activity and fall within the geographical region called 'Rest of Europe'.

8. Annual Report

Copies of the Annual Report will be sent to shareholders by 31 May 2013 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.

9. Annual General Meeting

The Annual General Meeting of the Company will be held at 12.30pm on 25 June 2013 at the offices of Eversheds LLP, One Wood Street, London EC2V 7WS.