Zincox Share Discussion Threads

[cyfran101] 09/6/2015 23:37

There is a lot here to stiffen the resolve of a holder.

They appear to have stemmed issues with EAFD shortfall that was recently highlighted as an issue and are improving reliability month to month.

Looking forward to how they will implement KRP2 that will give them flexibility and greater margins on speciality products.

[loganair] 09/6/2015 16:14

A little extra bones to the update:

The plant is backed by the IFC, Teck Resources as shareholders and Korea Zinc a a lender and strong supporter.

The EAFD plant processed some 15,668t in May to produce 3,618t of zinc in concentrate at a 91% zinc recovery level (target 95%).

• This was short of its target 17,600t per month due to a lack of contracted EAFD dust available to the plant. New contracts effective from July should bring the tonnage processed up to the target level and we understand the plant has run for some weeks at around 16,666t per month.

• The trick is to raise throughput, recovery rates and optimise the use of gas into the plant.

• In theory the plant should produce 4,063t per month at the 91% recovery rate and 4,242t per month at the target 95% recovery rate depending on the grade of zinc in the EAFD.

• This equates to 48,756 - 50,910tpa though this could improve if EAFD grades rise to >28% as suggested in the company’s presentation.

• Zinc prices are currently around $2,129/t and have averaged $2,146/t this year vs last year’s average of $2,162/t, indicating not much price erosion in the zinc price compared with other metals

• Expansion: management reckon they can double revenue at only 30% additional operating cost suggesting potential for a significant reduction in unit operating costs.

• Debt: ZincOx renegotiated US$15m of debt with Korean zinc delaying the capital repayment by 12 months so that it now falls due in February 2016 with repayments split over six equal payments of US$3.1m, including rolled up interest starting in February 2016. As part of the negotiations, Korea Zinc has increased it offtake agreement to 1,050,000 tonnes.

• Conclusion: ZincOx continues to improve its operation and we look forward to better news going forward.

[rivaldo] 09/6/2015 15:35

SP Angel's morning report, including a review of today's news, can be seen via here:

http: //www.shareprophets.com/views/12720/sp-angel-morning-mining-note-beowulf-mining-gemfields-kirkland-lake-gold-mariana-resources-noricum-gold-and-zincox-resources

Interesting to read that "Expansion: management reckon they can double revenue at only 30% additional operating cost suggesting potential for a significant reduction in unit operating costs"

[rivaldo] 09/6/2015 09:21

Brief update from Finncap FYI:

"ZincOx Resources*: Positive KRP update (CORP)

The group has announced an improvement in plant performance in May, building on the progress achieved in April. The Korean plant achieved an EBITDA of $1.01m in May, up from $0.768m in April. EAFD processed was 15,668 tonnes, up from 14,533 tonnes (compared with a target rate of 17,600 tonnes), with the zinc recovery rate improving from 90% to 91% (against a target of 95%). In April, planned maintenance restricted plant operation for four days, while in May the plant was fully available, but some restriction in the availability of EAFD feed curtailed processing. This is currently being addressed, with ZincOx looking to enter into new supplier contracts, which are expected to become effective in July. This is an encouraging announcement and builds on the recent turnaround in trading at KRP. The shares have lifted from their nadir and today’s announcement should be taken well by the shares."

[celeritas] 09/6/2015 08:39

Zinc is actually lower than last month it's now $2118 from $2400. The fall was probably caused by the stock delivery into the LME. However I do expect a good second half for zinc, with a better first half next year as the full affects of Century are felt.

[cestnous] 09/6/2015 08:04

Yes Riv, just what we need for increased confidence as the price of Zn climbs :¬)

[rivaldo] 09/6/2015 07:32

Looks like excellent news today:



In particular, imagine if the $1m EBITDA in May was enhanced by solution of the maintenance and EAFD problems which arose in April and May....which it soon will be:

"Commenting on the announcement, Andrew Woollett, ZincOx's CEO, said "Generating US$1 million of EBITDA in a month is an important milestone for the Company. The continuing optimisation of the operation in Korea is leading to greater profitability and further fine tuning of the plant should increase recovery over the next few months"

Great stuff.

[cestnous] 03/6/2015 15:36

Bit of consolidation at resistance here. A little bit of good news should should push us through then hopefully on towards the twenty mark. Of course the converse is true on bad news :¬)

[extrader] 19/5/2015 10:08

Hi cestnous,

provisional target 24p.

Works for me ! ;->

ATB

[cestnous] 19/5/2015 09:36

Sticking with this; provisional target 24p.

[matt123d] 19/5/2015 09:33

Taken some profits here this morning on the gap fill.

[celeritas] 19/5/2015 09:20

lme inventories down to 435,925, dropping daily at a good rate now.

[quilarvium] 18/5/2015 13:02

Looking good.

[matt123d] 18/5/2015 12:44

Retest of the 13.875p prior high then a break back to the upside. Upper level weekly triangle 18.875p.

[loganair] 15/5/2015 17:21

Celeritas - I very much keep in mind about mines closing and have posted a good number of aticles saying as much. Also some existing mines are increasing their capacity to take up some of the slack.

All I am saying, is not to get too over exhuberant about the reduction in Zinc stored in LME warehouses as not all of it is being used, some is just being transfered to other storage sites.

I agree ZOX is doing very well as they were taking a conservative price of $2,000 per ton when writing their last final report. Due to their running costs being mostly fixed most of the extra income from a higher Zinc price goes straight to the bottom line as profit.

[celeritas] 15/5/2015 16:29

But you are losing sight of the large mines still to close, this will exasperate the zinc tightness. Zinc moving into other places could be a simple as protecting their supply for the future.
Century alone will take with it 500,000 tonnes this year, Lisheen will then take 170,000 tonnes. Nothing will replace that amount of zinc. Due to low prices for a number of years investment in new mines is at zero, no-one has done anything about it. Even if a new large deposit was discovered it'll still take 3+ years to get it operational. From discovery to planning to building to being operational takes a long time.

Zox will do very very nicely with zinc sitting in the $2300 to $2400 range, not to mention the possibility of a partner at any point for another plant.

I also hold GFM, been in and out for a long time, really following zinc. I've waited for this point for some time and have expected it after zinc went too low, next year will be a lot tighter than this but then I expect investment to pick up with smaller mines opening but still no large mine to replace all the lost production.

[loganair] 15/5/2015 15:55

Celeritas - I agree the amount of Zinc in storage is going down, however it seems to me that some of this is going to Shanghi

Higher treatment charges (TCs) show there is ample mine supply and lacklustre physical premiums mean there is good supply and availability. LME stocks have been falling but much of that outflow is thought to be metal moving to off-market warehousing deals.

The fall in LME stocks continues at a steady pace, with stocks last at around 520,000 tonnes, down from around 690,000 tonnes at the start of the year. Stocks have been falling at an average rate of 2,876 tonnes per day; at that pace stocks, could be as low as 200,000 tonnes in about 20 weeks. This means that LME stocks may be considerably lower just when the fundamentals start to tighten. Such a scenario could create quite a bullish environment for zinc. Still, with most of the zinc outflow coming from just a few warehouses, it looks as though some the metal is leaving LME sheds not to feed industry but to move into non-LME storage.

[celeritas] 15/5/2015 15:46

Ok, but no-one can prove it. It's got nothing to do with two large mines already closed and a further two large mines to close, one of them being the second largest in the world. These are facts, saying zinc is going into storage in Shanghai isn't. LME inventories are fact, zinc prices are fact. We know the Chinese have zinc in storage but no facts on how much.

Zinc is mainly a supply side story, supply is falling fast with no new large mines on the horizon to replace them.

[loganair] 15/5/2015 15:23

Not to get to over excited as some of the LME withdrawls are going to the storage in Shanghai.

[celeritas] 15/5/2015 11:55

Zinc stocks steadily being removed from inventories, now at 442,000 tonnes, to think it was 760,000 tonne a year back. I'm just wondering how quick withdrawals will be once Century stops shipping this year.

[boonkoh] 14/5/2015 10:56

Can the share price break above 14p and continue a leg up to around 18p? The rise has been on the back of small volumes, so it looks like the speculators have yet to catch on to ZOX....

[rivaldo] 14/5/2015 09:42

The improving prospects for Zinc were featured in the FT on Tuesday:



Extract:

“It’s going to be zinc’s time in the sun,” says Kim Robinson, managing director. “There has been no exploration for a while and major deposits around the world are starting to run down and go out of production.”

The restart of Gorno is the latest sign of improved sentiment towards zinc, which has been boosted by the weakening of the US dollar. The metal has risen 7 per cent this year in trading on the London Metal Exchange, close to its three-year high of $2,415 a tonne in July.

Investor interest has increased in recent weeks, as reflected in a sharp rise in open interest, or the number of futures contracts, on the LME, according to Capital Economics. The futures curve has moved into backwardation, where prices for immediate delivery are higher than those for the future, suggesting a near-term supply shortage."