ZincOx Resources has entered into a Sale and Purchase Agreement (SPA) with Korea Zinc Company Ltd in regard to its remaining interest in Zinc Oxide Corp (ZOC), formerly known as ZincOx Korea Ltd, owner of the Korean Recycling Plant (KRP).
KZC has agreed to pay a total of $7,950,000 in two tranches for the remaining interest in ZOC, of which $7,000,000 is to be paid within three weeks and the balance once KZC has completed various procedural requirements in Korea.
In the event that the second tranche is delayed by nine months, interest will start to be paid at five per cent. per annum on the amount outstanding. It is anticipated that the second tranche will be paid within six months and in the meantime the shares will be held by KZC in escrow.
The carrying value of this asset shown in the Interim Statement of the Company at 30 June 2016 was $5,800,000; thus this transaction results in a gain of approximately $2,000,000.
The proceeds from the sale will be used to repay the Company's Corporate Loan Notes, which together with accrued interest amounts to approximately $5,000,000 (£4,000,000). The balance will be used to progress other projects upon which we have been working.