The LOI also covers an off-take agreement with Korea Zinc, under which Korea Zinc will purchase the unwashed zinc concentrate produced from Phase 1 of the KRP development for 10 years.
The loans, once finalized, together with the existing cash within the business, will allow ZincOx to proceed with the construction of Phase 1 of the KRP with the intention to achieve first production, on the current development schedule, in the first quarter of 2012.
ZincOx intends to treat 200,000 tons of steel waste dust (EAFD) in Phase 1 to produce 70,000tpa zinc oxide concentrate at 58% zinc and approximately 95,000 tons of intermediate iron product annually, with plans to double the plant capacity in Phase 2.
ZincOx has signed ten-year supply agreements for EAFD with all the electric arc furnace operators in South Korea for both Phase 1 and Phase 2 that are expected to generate a project EBITDA of about $29m per annum.
ZincOx executive chairman Andrew Woollett said that ZincOx is pleased to have reached agreement with Korea Zinc regarding these financing arrangements and that the company can now move forward with its first metal recycling project in Korea.
