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ZincOx subsidiary in talks over Jabali bond repayment

By BFN News | 09:50 AM | Friday 02 October, 2009


Exploration group ZincOx Resources is negotiating with bond-holders to avoid a repayment which could be triggered by delays in reaching a production milestone at its Jabali mine. The group says its 52%-owned subsidiary Jabal Salab has completed the $120m bond facility to be utilised in construction of the Jabali mine and plant. ZincOx's liability is limited to $5.2m. The facility anticipates project development milestones which include reaching production of 63% of capacity by mid-August 2010, with regular reports to bond-holders from a technical adviser. Jabal Salab has been made aware that the technical adviser has notified the bond-holders it believes the production milestone will be achieved two to three months after the August deadline. This constitutes a default and triggers the right to demand repayment of the bond. The management of Jabal Salab has started discussions with the bond-holders with a view to accommodating any delay within the facility. Jabal Salab is working with the technical adviser to draw up a revised development schedule. ZincOx says it currently has more than £45m in cash not currently earmarked for the development of the Jabali project.

Story provided by Business Financial Newswire