A costing exercise undertaken in September 2010 indicated a capital cost of US$110 million for KRP. In December 2010 the company announced the signing of a Letter of Intent with Korea Zinc Co Ltd for the provision of loans amounting to US$50 million for the development and a ten year zinc concentrate Off-take Agreement to purchase the unwashed zinc concentrate (HZO) produced. This was ratified as fully binding agreements in April 2010.

Korea Zinc is an integrated zinc and lead producer with over 30 years of history in smelting. In 2009 it produced 440,000 tonnes of zinc from Onsan in South Korea, 220,000 tonnes from Townsville in Australia. Korea Zinc entered into the LOI with ZincOx following a due diligence exercise that examined in detail the technology to be used by ZincOx.

At a zinc price of US$2250 per tonne, KRP is expected to generate a basic EBITDA, excluding any iron revenues, of US$20 million.

The zinc grade of EAFD varies from one mill to another depending upon the operating practices and type of scrap being used. ZincOx targeted mills with higher zinc grade for KRP so as to enhance early cash flow.


Zinc Concentrate