ZincOx Resources plc has entered into a Memorandum of Understanding (MoU) with Korea Zinc Company Limited for the joint development of a recycling plant in Vietnam. The MoU sets out the principle terms of a Joint Venture Agreement under which Korea Zinc and ZincOx will jointly design and develop the new recycling plant.
|The Korean Recycling Plant in South Korea at which the waste dust generated by recycling galvanised steel scrap is recycled.|
The recycling plant will be based on the Rotary Hearth Furnace (RHF) technology developed by ZincOx in Korea, and where Korea Zinc is the company’s partner. The Korean Recycling Plant is one of the world’s largest facilities recycling the waste dust (EAFD) generated by recycling galvanised steel scrap and has an annual design capacity of 200,000 tonnes.
The Vietnam recycling plant is planned to annually treat 100,000 tonnes of EAFD and in addition to upgrade both the iron and zinc intermediate products of the RHF to final products.
The MoU foresees Korea Zinc funding 100% of a definitive development study (DDS) in sufficient detail to enable the raising of project finance for construction of the project. The DDS is expected to cost about US$2.5 million.
Korea Zinc will own 51% of a special purpose company which will be set up to develop the recycling plant, with the remaining 49% held by ZincOx.
ZincOx’s CEO Andrew Woollett said, “We can now accelerate the program for the development of this important project, and we look forward to entering into the full Joint Venture Agreement in the very near future.”
Meantime, on January 11, 2017 ZincOx entered into a sale and purchase agreement with Korea Zinc in regard to the company’s remaining interest in Zinc Oxide Corporation (ZOC), formerly known as ZincOx Korea Ltd, owner of the Korean Recycling Plant.
Korea Zinc has agreed to pay US$7.950 million in two tranches for the remaining interest in ZOC, of which US$7 million is to be paid within three weeks and the balance once Korea Zinc has completed various procedural requirements in Korea.
The carrying value of this asset shown in the interim statement of the company at June 30, 2016 was US$5.8 million, thus the transaction results in a gain of approximately US$2 million.
Proceeds will be used to repay the company’s Corporate Loan Notes which amount to approximately US$5 million. The balance will be used to progress other ZincOx projects.