Korean Recycling Plant Update

 6 March 2013

ZincOx Resources plc

("ZincOx" or the "Company")

Korean Recycling Plant Progress

ZincOx Resources plc (AIM: ZOX) announces an update on continuing progress to ramp up its wholly owned Korean Recycling Plant ("KRP") to full capacity. The plant has been processing electric arc furnace dust ("EAFD") at close to target throughput levels, however, stoppages for repairs and planned remediation work and national power saving restrictions imposed by the Korean government have curtailed overall monthly throughput.

During the latter half of January and first half of February there were a number of stoppages that resulted in the plant only achieving a modest increase in EAFD throughput for the month of January, with a total of 10,800 tonnes processed and a reduction to 9,400 tonnes for February. Over the last fortnight, however, the plant has run well, achieving 82% of required throughput, equivalent to a monthly rate of 12,700 tonnes.

As part of the Company's ongoing relationship with Standard Chartered Bank, it is putting in place a working capital facility of up to US$5 million with Standard Chartered Bank Korea Ltd, and is awaiting the approval of its Credit Committee.

For the first time, the Korean government has required all industrial facilities to reduce power usage for certain periods of the day over certain winter months. These restrictions were introduced on the 7 January and were in place until 22 February 2013. Before next winter, modifications to KRP will be made to enable overall monthly throughput to be maintained at design capacity should such restrictions be reintroduced.

Since the beginning of the year, the plant has been operating at or close to full target throughput on an hourly basis and mechanical equipment is running for long periods at a level greater than that for most of last year. At this higher throughput the equipment is being more severely tested and in some cases equipment has not been performing as designed. In almost all cases these issues can be resolved by minor modifications but require operations to be suspended. For example, the baghouse where the final product is recovered has failed to perform properly when running at full capacity over long periods. The equipment supplier has designed modifications to address this, but in the meantime the hourly throughput has been restricted for part of the time. In some cases, problems have arisen in equipment as a result of the unusually low temperatures (-15OC) experienced in this part of southern South Korea during this winter. Further winterisation steps have been taken to prevent re-occurrence of these problems..

Other stoppages have been the result of planned suspension required for the installation of new or modified equipment as envisaged at the time of the Company's update on 9 January 2013. The hot briquetting circuit, designed to produce the iron by-product, has been very substantially modified and simplified and its performance will be optimised over the next few weeks.

The corrosion in the heat exchanger was substantially resolved in November last year. However there has been further corrosion, albeit at a lower rate, at the base of the units. In order to remedy this situation, various corrosive resistant steels, alloys and coatings have been tested over the past three months. A suitably resistant material has been identified, new parts have been fabricated and next week a closure is planned for their installation in order to address this issue permanently.

As a result of the recent modifications, and following next week's closure, the throughput of the plant is expected to increase steadily over the coming weeks.

Commenting on the announcement, Andrew Woollett, ZincOx's executive Chairman said "The problems that arose over the past two months have been overcome and none have presented a long term cause for concern. Notwithstanding the disappointments of late January and early February, the plant is now operating with much greater reliability and we look forward to continuing the ramp up following the remediation next week. Teething problems for a plant using new game changing technology are to be expected but we believe the issues that could impact throughput are now largely behind us, and we look forward to achieving the target capacity."

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