Zincox Share Discussion Threads

[etarip] 02/5/2013 16:15

I added a third on Monday.

[rathkum] 02/5/2013 16:03

Well I have a gut feeling this a bottom or close to a bottom, therefore I have added big this afternoon.

If this goes belly up I will be kaput!!

[ceohunter] 02/5/2013 15:29

ZincOx over the worst and working towards full production

Andrew Woollett, Chairman of ZincOx Resources (LON:ZOX), tells Proactiveinvestors that while it has been a frustrating year the company is over 'the hump' and it is working to achieve target throughput on a regular basis. Andrew says that ZincOx is now working on creating 'significant positive cashflow' later this year.

[propercharlie] 02/5/2013 12:55

M&G must be using this to offload a few more today! I suspect that until they clear not too much will happen.

[propercharlie] 02/5/2013 10:07

rapier I do not share yr view.

IMO the loss is to be expected, as it produced only in 2h of year. It is now near target capacity, which means that it is near break even cash flow now. It also put in some remedial and maintenance costs of $2.6m and also put a depreciation charge of $3m into costs.

If you just look at 2h then t does not look so bad and current performance IMO is no longer a significant drain on cash.
some extracts:
"'''''
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.

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 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.


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.

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.

...."

[etarip] 02/5/2013 10:04

I found this most interesting:

"... 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."

[rapier686] 02/5/2013 09:16

Revenue $10m, Cost of Sales $21m is an absolutely shocking gap.
Granted I recognise they've been starting up, and things ought to be better going forwards but all the same...

"we are looking forward to it generating a significant positive cashflow before the end of the current year"

So still bleeding money as we speak, and probably for another 6 months. If things go according to plan.

[rathkum] 02/5/2013 08:42

Surprised at the muted response by the market on the back of this morning's RNS

[propercharlie] 02/5/2013 08:32

well the project is not failing. It is just taking longer to prove. IMO this is an upbeat RNS, problems almost all solved. Expectations now of acahieving targets in 2013. Once the 3 month continious production is proven eyes will be on KR2.
Then roll out.
With a market cap of just £20m, and the EBITDA of target KR1 as more than this, it looks a share with huge upside.

[chrisdgb] 02/5/2013 08:16

Indeed, let us hope they do some institutional meetings and get some buying interest to clear the overhang..

[blue59] 02/5/2013 07:37

I'll start the ball rolling with.........could be worse!

[propercharlie] 30/4/2013 14:04

I think that they must run the equipment consistently for 3 months before the next stage can be started.
the last RNS March 6th, so I would expect the next to be June 10th latest.
The $5m facility was agreed with STAN, and for them to have agreed, they must have done their DD and have access to an update which we are not entitled.
With the markets uncertainty, M&G selling their stake, N Korean games, no one is buying. This IMO causes the share price to drop.

Andrew Wollett 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."

I am holding, I have a quantity which will hurt if the project fails, but I believe that we are on a positive track after the 6th March RNS, otherwise STAN would not have made its loan.

[chrisdgb] 30/4/2013 09:44

Would be nice to give investors some reassuring news...

[499budgie] 20/4/2013 02:00

Yes, Been watching this again for some time and the market is too....I think the bottom is nearer than the top here now....just needs the knife to hit solid group....I will watch and see....

[chrisdgb] 19/4/2013 09:06

very depressing, clearly oversold but how do we get back over 30p...???

[boonkoh] 15/4/2013 23:41

Can't believe it's. On firmer financial footing now, and share price drops a but more.Definitely need those production numbers...

[propercharlie] 15/4/2013 15:24

M&G still have another 2m to sell. Each time there is any liquidity they will sell. This is a major factor to what is holding the share price down. I view the STAN loan as positive, they would have asked penetrating questions in the light of recent RNSs, and if they felt that the project was not in good shape they would not provide this gacility.
Whilst I am more positive in outlook that you Rathkum, I think we need that RNS which says problems fixed, production on targets and model fit for roll out.

[rathkum] 15/4/2013 09:03

Market reaction was " so what" hence no reaction to share price.Now let's see if you fix the problem.

[chrisdgb] 15/4/2013 08:57

What do we make of today's news...??

[rathkum] 04/4/2013 18:44

ProperCharlie

With the share tanking to an all time low, are you sure Andrew Wollett hasn't defected to North Korea.LOL

[boonkoh] 04/4/2013 18:10

Part of fall recently is due to Korean peninsula tensions. Korean stock market not down, but I guess UK investors with little Korean experience might be feeling skittish.

[propercharlie] 04/4/2013 08:06

i spoke with broker:
they know of no additional reason, ie nothing that we do not know, for the share price to be falling apart from what is out in the public domain.
one funds was not impressed with the funds rasing last year and the dilution, that caused the initial fall and momentum that followed.
Overall market awaits good news and until share price is not expected to rebound
Re finance, the $5m is not reporatble as a stand alone item, and is seen as a small interim finance. Stan want 3 months of consistant running before realsing funds for KRP2.
The market knows this is a bargian when the gremlins are fixed.

I added that maybe this has not been helped in last 2-3 days by year end, wih those with gains elsewhere wishing to offset a loss (against the gain) for CGT purposes.