ZincOx Resources plc (ZincOx) says that the throughput of the rotary hearth furnace at its wholly owned Korean Recycling Plant (KRP) has been steadily increasing as the plant ramps up to full production, and latterly it has been operating at over 70% of first year’s target capacity, which at today’s zinc price (US$1900/t) generates a positive EBITDA.
The hot briquetting circuit required modification and upgrading and this work has now been successfully completed so that the equipment may be operated at design capacity. The target quality of the iron product (ZHBI) will, however, need to await the installation of additional monitoring equipment which is scheduled for delivery in October. The positive operating cash flow, announced has thus been achieved without any contribution from the production of iron which, at current iron prices, would have contributed about a further US$5.5M of revenue per annum at full capacity. The precise value of the ZHBI is, however, awaiting the results of commercial test work by prospective customers.
A recent routine inspection of the plant has revealed corrosion in a small part of the gas handling system. Production has therefore been suspended while the corroded part is replaced. In order to prevent corrosion in future there has been a small modification to the design. Furthermore, stainless steel of a particularly high quality is required and this must be sourced and the part fabricated in Europe. Production is, therefore, likely to be suspended for about three weeks while the repair work is undertaken. The gas handling system was supplied by a consortium of German companies that provided process and equipment guarantees that will cover the cost of this remediation work.
The ZnOx Board expects to report half yearly results for the six months to year ending 30 June 2012 on 27 September 2012.