20th Feb 2007 07:02
ZincOx Resources PLC20 February 2007 New US Recycling project and expansion at Big River Zinc - 20 February 2007 ZincOx Resources plc (ZOX), is pleased to announce the completion ofpre-feasibility studies on an integrated zinc and iron recycling project whichwill include a new facility in Ohio and modifying and refurbishing the Big RiverZinc plant near St Louis. Using a zinc price of US$1,900 per tonne for the next five years and US$1,500thereafter the Ohio Project and Big River Zinc Project individually haveinternal rates of return of 20% and 35%, and have, net present values ofUS$60million and US$129million respectively (post tax, pre finance 10% discountrate). Commenting on the announcement, Andrew Woollett, ZincOx's Chairman said "Thesetwo projects, together with our new Turkish Project, complete the operatingstructure for our first fully integrated zinc, lead and iron recycling concept.This structure will enable us to recycle virtually all the valuable metals foundin electric arc furnace dust (EAFD), a problematic waste material produced whengalvanised steel is recycled. This structure and the proprietary technologyinvolved represents a blueprint that we intend to repeat elsewhere in theworld". At the Ohio Project a rotary hearth furnace will be used to treat EAFD torecover zinc and lead in an oxide concentrate (HZO) and to recover the containediron as a Direct Reduced Iron (DRI) product. The DRI will be melted in a smallelectric furnace that will produce a very clean slag suitable for constructionpurposes and pig iron which will be sold to the steel industry. The plant willbe designed to treat 200,000 tonnes per annum of EAFD for the production of48,000 tonnes of zinc contained in HZO and about 50,000 tonnes of pig iron. TheHZO will be sent to Big River Zinc for the recovery of the valuable metals. TheOhio plant will take approximately 18 months to construct at a capital cost ofabout US$107million. In June 2006, ZincOx acquired the Big River Zinc smelter, in Sauget, Illinois(BRZ). The HZO from both the Ohio Project and from the Aliaga project in Turkeywill be processed at BRZ. The zinc contained in the HZO will be dissolved inBRZ's refurbished leach plant. The resultant zinc bearing solution will bepurified in a new solvent extraction circuit, prior to conventional zincrecovery using BRZ's existing electrowinning, melting and casting equipment toproduce zinc ingots. The ZincOx management team used the solvent extractionprocess in the design of the flowsheet for the Skorpion zinc oxide deposit inNamibia, where it now accounts for 150,000 tonnes of zinc metal production perannum. Big River will be designed to produce 90,000 tonnes of Special High Gradequality zinc metal per annum. The refurbishment of the Big River plant andinstallation of solvent extraction will take approximately 16 months at a costof about US$90million. At Aliaga, in Turkey, (see announcement dated: 12 December 2006) ZincOx isplanning to develop an EAFD processing plant similar to that proposed for theOhio project. The capital cost of the Aliaga project is expected to beUS$106million with production commencing in mid 2008. The development of the plants in Turkey and Ohio and the refurbishment of theBig River Zinc facility are expected to require total capital expenditures ofabout US$303million, including contingencies. The company is investigatingvarious financing strategies including participation by one of ZincOx's largestshareholders, Teck Cominco. In December 2006, Teck Cominco, the world's secondlargest zinc mining company, increased its interest in ZincOx by 3.5% to 11.5%.Commenting on the financing, Andrew Woollett said "There are a number ofattractive financing options available to us, including the early sale of thefuture Shaimerden deferred payments, and we are optimistic that we will be ableto develop these projects without a major issue of new equity." For more information please contact: ZincOx Resources plcAndrew Woollett +44 (0) 1276 [email protected] Conduit PRLeesa Peters/Laurence Read +44 (0) 20 7429 [email protected] +44 (0) 781 2159885 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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