ZincOx debut debacle
Article Date: Dec 21 2001Shares in ZincOx Resources, floated on Aim 10 days ago at £1, have plunged to 68p already on thin volume, which the company's advisers suggest could reflect pre-float punters, who bought at well below the issue price, cashing in some of their chips. Robert Tyerman reports.
ZincOx (ZOX) is the new vehicle of geologist Andrew Woollett, former head of Reunion Mining, which he successfully sold to Anglo American. It intends to use new techniques to produce zinc at a cost of 22 cents a lb, well below even today's depressed zinc price, from deposits in the Yemen and elsewhere.
With the aid of broker Charles Stanley, ZincOx raised £3 million at the time of the float. Last year, some favoured investors bought in at 25p a share and in April the company raised more funds at 62.5p.
It is suggested the company could soon have some encouraging news about its Tsumeb tailings project in Namibia. Longer-term, all depends on whether the new zinc treatment process works as hoped ? and whether hitherto pro-western Yemen keeps out of the hands of islamic fundamentalists.
At the time of the float, the Mining Column suggested short-term investors should avoid the shares, but that they could still prove a rewarding long-term gamble. That view still applies.
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