ZincOx

SPECULATIVE BUY

17/04/2009 Robert Tyerman

Yesteryear fallen exploration star-turned zinc waste recycler ZincOx has signed feed agreements with Korea’s nine largest electric arc furnace operators.

The AIM-quoted company, which hopes to have a major recycling project in Ohio up and running first, has two years to set in motion the Korean project, which would generate 75,000 tonnes a year of zinc concentrate from arc furnace dust, says executive chairman Andrew Woollett. The project will require an estimated £166m and he says Surrey-based ZincOx, which at this stage has the right but not the duty to proceed with it, is talking to one or two Korean companies which might come in.

Since its 2001 flotation at 120p, ZincOx has undergone many changes of emphasis and geographic focus. The shares reached 427p in 2007 before collapsing to 25.5p last November.

If its latest projects come right, the shares, now 60p, might prove a bargain. But they undoubtedly carry risk and are not for the faint-hearted.

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Tags: AIM, Deals & contracts, Speculative punts

Sector: Mining

Companies: ZincOx Resources

Market cap: £46.5m

PE Forecast: 27

Share price: 60p