Broker: Ambrian
Company: ZincOx Resources
Share price: 51p
Target price: 104p
Recommendation: BUY
ZincOx Resources started out as a mining company but it has moved into the recycling of arc furnace dust to produce zinc.
ZincOx has completed the formal documentation for the financing of its Korean recycling plant as well as an off-take agreement. The loans are being provided by Korea Zinc Co. The off-take agreement covers all the zinc concentrate produced by phase 1 of the plant and lasts for 10 years. The plant will treat 200,000tpa of steel waste dust and should produce approximately 70,000t of zinc concentrate with a grade of 58% zinc and 95,000tpa of an intermediate iron product. Phase 2 will double capacity.
House broker Ambrian says that ZincOx is valued at less than its cash in the bank. The Korean recycling plant is fully financed and Ambrian believes that this project alone warrants a doubling of the share price.
