ZincOx fundraising bid fails

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ZincOx has failed in its attempt to raise the US$5 million that would have allowed it to reschedule US$57.1 million of debt owing to Korea Zinc. ZincOx will now hand a 90% stake in its South Korean recycling plant (KRP) over to its partner.

The remaining 10% stake may be diluted further if ZincOx is unable meet its share of the costs of running the currently loss-making operation.

The AIM-listed company has around £240,000 in cash and a profit-sharing interest in the Jabali zinc deposit in Yemen as well as industrial land in the US and Turkey. No value is given to the asset in Yemen, while the land in Turkey is worth £167,000. The package in America carries a price tag of £4 million but provides security for a bond due next July.

With cash tight, the company is cutting costs to the bone and the board has waived its remuneration. It is also looking at fund-raising alternatives as it sees potential value in its 10% stake in the South Korean plant if zinc prices move and it believes that the technology behind the operation is worth something.

ZincOx chairman Rod Beddows said, “We are obviously disappointed that we were unable to secure additional funding to retain a 100% interest in the KRP. However, our ongoing interest in the Korean recycling plant is significant and may act as a building block for the company and a source of cash if the zinc price returns to more sustainable levels. 

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