Fox Resources starts production

Pilbara nickel explorer and producer, Fox Resources Limited has commenced production of its second stream of nickel concentrate from the Company’s Radio Hill operations in Western Australia.

This particular nickel concentrate, called “Z con”, is being sold to Jinchuan Group Limited (Jinchuan) in a strategic offtake agreement, announced on 6 February 2008. The Z con is a by-product of the higher grade nickel and bulk concentrate currently being produced at Radio Hill.

Fox is targeting an estimated production rate for the Z con of 1,200 wet metric tonnes (wmt) for an estimated 30t of contained nickel per month. This monthly production will be in addition to the previous monthly forecasts of 167t nickel and 287t of contained copper metal.

Fox Managing Director, Mr Don Harper, said in addition to the commencement of the Z con production there were other positive updates from Radio Hill.

In early February, a shipment of bulk concentrate from Radio Hill departed the Port of Dampier for the Chinese port of Lianyungang representing a $6.1 million value for Fox. Our copper production in particular is experiencing the benefit of a rapidly rising copper price, said Mr Harper.

The February bulk concentrate shipment of 5,242 wmt, comprised of a provisional estimate of 239t of nickel and 380t of contained copper metal which was above forecast. The next shipment of an estimated 5,500 – 6,000 wmt is scheduled to depart in March 2008.

We have also made some recent improvements to the mill at Radio Hill, including the installation of a state-of-the-art ore screening unit,” he said. “This unit has enabled an immediate reduction in the scat rate, or hard ore rejects, and increased nickel and copper metal recovery.Additional booster tails pumps have also been installed to alleviate bottlenecks in ore throughout and has resulted in the mill breaking through the 50 tonne per hour production rate. We are now targeting a 10% increase in production to 55tph.

Mr Harper went on to say that underground operations continued to deliver ore to the surface on schedule.

On 24 January 2008, Fox announced that mining of the last development level (975RL) intersected unexpected massive nickel and copper sulphides up to 4 metres thick. Mine design has been completed to access the lower levels of the high grade massive nickel sulphide F-Zone. Assays of massive sulphide samples taken from the development returned excellent indicative results averaging 4.71% nickel and 9.06% copper. Mine design to access the F-Zone ore has been completed with high grade ore production expected next month.