Former metals recycling business ZincOx Resources (ZOX:AIM) has set itself on the path to recovery after raising £300,000 at a significant premium.
Shares in the company soar 28% to 0.8p as a result of placing of 30 million new shares at 60% higher than yesterday’s closing price.
ZincOx used to recover metals from steel waste dust but got into financial difficulty amid a shock drop in the zinc price. Its joint venture partner and financier Korea Zinc ended up taking ZincOx’s 90% stake in the recycling plant after the small cap couldn’t pay back a large loan.
The UK-based business has now raised new money to pursue other opportunities in the resources space.
After the placing, the firm says it will have £440,000 in net cash resources. It wants to capitalise on its metals recycling intellectual property.
The company is currently in discussions with potential strategic partners to develop new recycling projects.
ZincOx is working with a consortium of US and international investors known as EETAC and is considering a bid for specific assets of Doe Run Peru.
EETAC is interested in the metallurgical complex of La Oroya and Cobriza mine in Peru. ZincOx is advising the consortium on technical, operational and business aspects relating to the restart of operations. It hopes to get a carried interest in the project.
The Doe Run Peru metallurgical complex of La Oroya is one of the largest polymetallic treatment facilities globally, and is in one of the most important base metal producing regions. It is presently in liquidation.
In addition, ZincOx is working with GreenNovo Environmental Technology to identify zinc processing and dust recycling opportunities in China.
Elsewhere, long-standing ZincOx finance director Simon Hall has left the business as part of cost cutting measures. He will be replaced by a part time finance director.