Zincox Share Discussion Threads

[propercharlie] 15/8/2012 17:16

Great post, slide in share price might have been simply small volume sells in a small volume nervy market.
This does hold great promise. I certainly topped up today!

[gingerplant] 15/8/2012 07:04

Well - the reason for the share price slide doesn't seem to be anything to do with insider knowledge of production problems:



Key parts:

Zinc recovery rate is steadily improving and is generally between 92% and 99% (target: 97%). The zinc concentrate which has a zinc grade of over 63% (target: 58%), is being sold to Korea Zinc as part of a ten year offtake agreement.

Overall plant throughput is expected to reach 85% by the end of September and 90% by the end of October.

" "The success of the process has now been clearly demonstrated and while full production is taking slightly longer to achieve than expected, solutions for the outstanding issues have been identified and we are looking forward to positive cashflow in the near future"

[gingerplant] 14/8/2012 18:08

Thans etarip. A little discrepancy between foreacsts for next year I see; Peel Hunt forecasting a £3.19m loss, Daniel Stewart a £6.48m profit and Finncap £6.2m. Someone's a long way out!

[etarip] 14/8/2012 17:21

GingerPlant:

Look at ProperCharlie 24 Jul'12 - 08:15 - 1295

[gingerplant] 14/8/2012 14:57

Isn't it fears over the price of zinc? The model is based as follows:

"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."

Currently $1,820.50. I've seen a basic probable break even figure somehwhere but can't find it just now.

But - as ZOX say "Physical metal always trades at a premium to the quoted price and the premium will change from place to place, reflecting regional shortages and from time to time as the market swings from surplus to deficit. Generally speaking the premium is in the range US$50 to US$120 per tonne."

[patrader] 14/8/2012 14:43

i dont even think its anything nasty my view is its just the stock isnt doing anything so just taking up capital that could be probably better allocated elsewhere and so as a result dumping stock hence the price

[rathkum] 14/8/2012 14:38

Does the market sniff something nasty or is it the weakness in the price of zinc? Most probably the former

[patrader] 14/8/2012 14:24

Whats the general opinon of this stock? I like the idea, however seems to be some negative sentiment in the markets with this one, assuming institutionals wanting out as its doing nothing for them not even a div. However am interested looking at the RSI down towards the 30lvl

[onlyonestorm] 14/8/2012 14:11

Well I sent an email last week asking when we could expect an update but as of today I have NOT had a response!! Very annoying!

[etarip] 07/8/2012 11:10

We need some news on how production is progressing.

[giant steps] 31/7/2012 11:56

ZOX chart reminder

[steve239] 24/7/2012 20:27

Regarding Executive Chairman Andrew Woolett's interview last October, he stated "We've negotiated our feed supply contract so that we have a variable operating cost.....at lower zinc prices we have lower operating costs and that means that we're pretty much going to make a profit at any imaginable zinc price".

Peel Hunt's estimate of a 17p fall in share price per $100/tonne fall in zinc price is clearly overstated, as the figures simply don't stack up. However even if you accept this as a fair estimation, you need to examine more closely what was said by Peel Hunt last October when issuing a target price.

They stated "The current share price stands at a large discount to Shepherd-Barron's sum-of-the-parts (SOTP) fair value estimate for ZincOx of 134 pence. This could increase within a year as the analyst expects ZincOx to address the project's technology, commissioning and financing risks within a year.

If those risks are negated, Shepherd-Barron's valuation of ZincOx will go up to 175 pence."

Nine months later, these risks are now largely negated, with technology more or less proven, commissioning completed, ramp-up underway and next stage financing secured, so their valuation (based on $2,250 per tonne) should be much closer to 175pence than 134pence.

So even if you allow for a $360 drop in prices (to which they would attribute a drop in the share price of 61p) you are still looking at an share price of £1 or more.

Peel Hunt's most recent price for ZOX was 122p, issued on 2 July in the knowledge that zinc prices were around $1850 per tonne.

[propercharlie] 24/7/2012 08:15

if i recall one of the messages Wollet gave was that he is protected by the Zinc orice due to the take off agreement with the Koreans. I think he says something like we make money at whatever the price of Zinc!
source interview proactive video

[etarip] 20/7/2012 18:03

If you assume the price of zinc is US$1462 per tonne then Peel Hunts value of Zincox becomes valued at zero. 134p - {(2250-1462)/100} x 17p = approx zero.
However, at 1462 US$1462 per tonne is above the break even.

[sea7] 20/7/2012 13:17

from proactive in oct 2011

Peel Hunt analyst Andrew Shepherd-Barron currently rates the zinc recovery specialist as a "buy" and values it at 134 pence per share

Peel Hunt's estimates used a long-term zinc price assumption of US$2,250 per tonne with a US$100 change impacting the project's net present value (NPV) by 17 pence per share.



The price is currently nearly $400 below the quoted figure.

Gives a good idea why the share price is where it is despite production starting.

[sea7] 20/7/2012 09:45

until full ramp up and plant optimisation is complete then there is a small technological risk still to be removed, although this diminishes daily.

The main risk is the zinc price, all projections are on price of $2250. Price at the moment is around $1890, storage at lme warehouse is over 1m tonnes. The break even price for zincox is around $1100 per tonne, I think!!


This is a link to a corporate video of the company:- (17 jul 12)

[propercharlie] 14/7/2012 16:39

increased my stake in ZOX today by 20%.

Based on phase 1 [start May 2012] EBITDA of $31m, [£20m], we can apply an EBITDA multiple of 4 on this and the minimum valuation as of now should be £80m or a share price of 90.

Based on the Phase 2 [from q4 2013] EBITDA of £35m [$53], applying and EBIDA multiple of 4 the share cap would be £141m or a share price of 158.
Stan Chartered has agreed a finance package and resummably would continue to offer on a project by project without further dilution being required.

With a growth scenario in mulltiple markets this has a chance to becocme a multiple of 158.

So what are the risks?

[etarip] 03/7/2012 12:43

Another mention of Zincox in the Times today about the involvement of Standard Chartered in financing the company.

Let us hope this publicity brings the company on to more peoples radar.

[onlyonestorm] 02/7/2012 10:11

It would appear that everything is in place now, finance, orders (10 years read detail), process proved and tested & potential to set other installations worldwide if the need is there!! Onwards and upwards!!

Stormy

[cestnous] 02/7/2012 08:40

GB
I did not know that having not seen the original article but I agree with your comments. I see that Standard Chartered have announced their involvement in the financing so the author was at least correct in that respect. It should result in more confidence amongst other potential investors.

Edit; Breakout it seems.

[grahamburn] 01/7/2012 13:59

Remember that was NOT an article about Zincox as such: it was simply part (OK a large chunk - over a quarter) of the MARKET report in the newspaper (ie based on market chatter). So inevitably it would be lightweight and cobbled together rather being an analytical well-researched item.

[cestnous] 01/7/2012 12:43

Thanks for posting the article.
Personally, I think that this article casts too pessimistic a slant of the successes so far. I would appear that the author has speed read ZOX's history and failed to take account of American intransigence and other political events. Failing to bring attention to the fact that it gets its feed stock for free is another indication of the writers shallow approach.

[homebrewruss] 01/7/2012 09:49

here's the times aricle

Bank's top brass takes an interest as ZincOx shows its mettle - again

It takes an awful lot to get private investors revved up about smaller resource shares these days. Far too many were eviscerated by vertiginous price collapses last summer and then again since early this year.
A few brave souls did start to nibble on ZincOx Resources yesterday as they set aside its serial disappointments and bet on more lucrative times ahead.
ZincOx has a plant up and running in South Korea that uses a clever process to recover zinc and iron from a toxic by-product of steel recycling. Rendered harmless, the zinc can then be sold.
About a year ago, ZincOx secured debt finance from Korea Zinc, one of the very biggest players, to build its first plant to test whether its process worked. It did.
Now, ZincOx wants to build a second plant. Unusually, Standard Chartered has become involved with an AIM company whose market value stands barely north of £50 million. The Footsie bank centred on emerging markets organised a visit for clients to ZincOx's site and allowed its top brass to present at a conference it organised.
Those who watch smaller resource companies closest suggested that StanChart may be courting the £120 million debt financing in the pipeline.
There were whispers that not only Korea Zinc, but also Belgium's Nyrstar, ArcelorMittal and Glencore International were sniffing around, looking to be involved in the funding for a second plant, also in South Korea.
Should Korea Zinc be cut out this time, optimists wondered, then might it not be interested in simply buying ZincOx outright?
Shares that changed hands for 427½p in summer 2007 and for nearly 80p in January edged 2.3 per cent higher to 61p.
Cynics noted that ZincOx carried something of a reputation as a "jam tomorrow" company, having raised millions of pounds by issuing new shares at north of 100p since 2007. Not for widows or orphans this one.

[propercharlie] 30/6/2012 23:29

etarip, my thanks

[etarip] 29/6/2012 12:52

ProperCharlie:
Sorry, I am not able to copy the article.
It said the usual things about the developments in South Korea. Also mentioned that the majors may be interested in bidding for the company.
But as graham says above, ended with "not for widows or orphans"