New US Recycling project and expansion at Big River Zinc

This Press Release was found on the ZincOx website.  We thought it would be intresting to involved in the zinc market.

New US Recycling project and expansion at Big River Zinc - 20 February 2007

ZincOx Resources plc (ZOX), is pleased to announce the completion of pre-feasibility studies on an integrated zinc and iron recycling project which will include a new facility in Ohio and modifying and refurbishing the Big River Zinc plant near St Louis.

Using a zinc price of US$1,900 per tonne for the next five years and US$1,500 thereafter the Ohio Project and Big River Zinc Project individually have internal rates of return of 20% and 35%, and have, net present values of US$60million and US$129million respectively (post tax, pre finance 10% discount rate).

Commenting on the announcement, Andrew Woollett, ZincOx’s Chairman said “These two projects, together with our new Turkish Project, complete the operating structure for our first fully integrated zinc, lead and iron recycling concept. This structure will enable us to recycle virtually all the valuable metals found in electric arc furnace dust (EAFD), a problematic waste material produced when galvanised steel is recycled. This structure and the proprietary technology involved represents a blueprint that we intend to repeat elsewhere in the world”.

At the Ohio Project a rotary hearth furnace will be used to treat EAFD to recover zinc and lead in an oxide concentrate (HZO) and to recover the contained iron as a Direct Reduced Iron (DRI) product. The DRI will be melted in a small electric furnace that will produce a very clean slag suitable for construction purposes and pig iron which will be sold to the steel industry. The plant will be designed to treat 200,000 tonnes per annum of EAFD for the production of 48,000 tonnes of zinc contained in HZO and about 50,000 tonnes of pig iron. The HZO will be sent to Big River Zinc for the recovery of the valuable metals. The Ohio plant will take approximately 18 months to construct at a capital cost of about US$107million.

In June 2006, ZincOx acquired the Big River Zinc smelter, in Sauget, Illinois (BRZ). The HZO from both the Ohio Project and from the Aliaga project in Turkey will be processed at BRZ. The zinc contained in the HZO will be dissolved in BRZ’s refurbished leach plant. The resultant zinc bearing solution will be purified in a new solvent extraction circuit, prior to conventional zinc recovery using BRZ’s existing electrowinning, melting and casting equipment to produce zinc ingots. The ZincOx management team used the solvent extraction process in the design of the flowsheet for the Skorpion zinc oxide deposit in Namibia, where it now accounts for 150,000 tonnes of zinc metal production per annum. Big River will be designed to produce 90,000 tonnes of Special High Grade quality zinc metal per annum. The refurbishment of the Big River plant and installation of solvent extraction will take approximately 16 months at a cost of about US$90million.

At Aliaga, in Turkey, (see announcement dated: 12 December 2006) ZincOx is planning to develop an EAFD processing plant similar to that proposed for the Ohio project. The capital cost of the Aliaga project is expected to be US$106million with production commencing in mid 2008.

The development of the plants in Turkey and Ohio and the refurbishment of the Big River Zinc facility are expected to require total capital expenditures of about US$303million, including contingencies. The company is investigating various financing strategies including participation by one of ZincOx’s largest shareholders, Teck Cominco. In December 2006, Teck Cominco, the world’s second largest zinc mining company, increased its interest in ZincOx by 3.5% to 11.5%. Commenting on the financing, Andrew Woollett said “There are a number of attractive financing options available to us, including the early sale of the future Shaimerden deferred payments, and we are optimistic that we will be able to develop these projects without a major issue of new equity.”

For more information please contact:
ZincOx Resources plc
Andrew Woollett +44 (0) 1276 450100
awoollett@zincox.com
www.zincox.com
Conduit PR
Leesa Peters/Laurence Read +44 (0) 20 7429 660
leesa@conduitpr.com +44 (0) 781 2159885