Companies: ZOX   

ZincOx Resources has received a first $9 million (£4.5 million) from Kazakh group Kazzinc for production from Shaimerden in Kazakhstan.

AIM-quoted ZincOx, which has moved from a mining hopeful to an extractor of zinc from other companies’ mineral tailings, says the £4.5 million is the first of five deferred payments under the 2003 agreement to sell the Shaimerden deposit to Kazzinc. The payment relates to a deemed minimum annual production of 40,000 tonnes of zinc from Shaimerden, which started producing in September, and so has been assumed to be 11,616 tonnes between then and the end of last year.

The payment to ZincOx is at the rate of 23.75 US cents for each dollar by which the zinc price exceeds $800 a tonne. The price averaged $4,077 a tonne for the period in question and, since the agreement covers another 188,384 tonnes of production, ZincOx can expect a series of larger payments from this source alone.

ZincOx chairman Andrew Woollett says the company expects the Shaimerden sale payments ‘to increase substantially over the next couple of years’. ZincOx shares were floated at 120p in 2001 and had a dismal time before surging from 46p in 2004 to 293.25p last April, having been recommended at 129.5p in May 2005 by Growth Company Investor, which suggested partial profit-taking at 278p last November.

The shares are now 272.5p, up 19p today and valuing the company at £126 million. They could still have speculative momentum.

ZincOx	AIM	£24.05m	31.00p	-0.50p
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