23 December 2005 ABN 44 079 902 499 $3.2 MILLION UNHEDGED SHIPMENT OF NICKEL AND COPPER DEPARTS FROM PORT OF DAMPIER HIGHLIGHTS �� 16th shipment of Radio Hill nickel concentrate (2,281 wmt @ 9.5 % nickel) and copper concentrate (651 wmt @ 30% copper) left Dampier on the 22nd December with an estimated sales value of $3.2million. �� All nickel and copper shipped is now unhedged, capitalising on a high current spot price of $18,000 per tonne nickel and $6,000 per tonne copper. �� F-zone orebody delivers higher copper grades and tonnes than previously expected. �� Upgrade of the copper flotation circuit underway to increase copper and nickel recoveries. �� Successful capital raising of $3million strongly supported by institutions. �� Repayment of $1million scheduled for 30 December 2005 reducing project debt to $2million. �� West Whundo Copper Project Feasibility Study to include mining ore remaining exposed at the base of the old Whundo pit, containing an indicated JORC resource of 32,000 tonnes @ 5.3% copper and 8% zinc, with an estimated gross metal value of $14million. RADIO HILL MINE OPERATIONS UPDATE Fox Resources Limited (“Fox”) (ASX code FXR) is pleased to provide the following update on the Company’s Radio Hill Nickel Mine. 16th Concentrate shipment to Jinchuan Ltd in China Fox is pleased to announce the departure of its 16th shipment of nickel and copper concentrate to China on 22 December 2005. Provisional details of the shipment are as follows; • Tonnage - 2,281 wmt of nickel and 651 wmt of copper • Nickel concentrate - 9.5% nickel, 2.9% copper and 0.5% cobalt • Copper concentrate - 30% copper • Estimated sales value - $3.2 million (based on current metal prices, exchange rates and provisional weights and assays)
December 2005 Production on Track As of the 21st December, mill throughput for the month-to-date (MTD), including a 12 hour planned mill shutdown, was 12,645 tonnes at 1.67 % nickel and 1.93% copper. Estimated average daily filtered nickel concentrate production is 82 wet metric tonnes (wmt) @ 9.6% nickel, and copper concentrate production is at 27 wmt @ 30.6% copper per day. As previously announced in the September quarterly the F-zone geometry has now been re-defined. Stope production out of F-Zone is now providing excellent ore delivery to the mill at an estimated head grade of 1.6% nickel and 1.8% copper. MTD recoveries through the mill are being maintained at an impressive 78% for nickel and 68% copper. Mill Upgrade As previously announced on 14 December 2005, part of the proceeds of the capital raising will be used to increase the size of the copper flotation circuit. Design work is now underway for the installation of previously acquired flotation cells already on site. This upgrade will significantly increase the copper recovery from F-Zone ore and generate additional revenue for minimal capital expenditure. The flotation upgrade is expected to be completed in March 2006. Capital Raising Fox successfully completed a $3million capital raising which was led and managed by Bell Potter Securities Limited. The placement of 12.7 million shares was strongly supported by institutional and sophisticated investors. Proceeds raised as previously announced will be used for capital expenditure including the mill upgrade, debt reduction, working capital purposes, and will contribute towards development of the West Whundo Copper Project where Fox aims to commence mining in the first quarter of 2006. Debt Reduction The company will reduce its project debt from $3million to $2million by the repayment of $1million to Societe Generale by 30 December 2005. West Whundo Copper Project Feasibilty Study Update As previously announced open pit optimisation studies are underway with all hydrological, geotechnical and environmental studies completed. Metallurgical tests are currently being carried out at laboratories in Perth. Metallurgical testwork include gravity table and heavy media separation methods aimed at upgrading the high grade chalcocite and massive sulphide copper ores to direct shipping grade ore. Further test work is being carried out to recover copper from oxide ore through a sulphidisation method using the existing Radio Hill mill which will add further revenue to the project. The feasibility study is also examining the economic viability of mining the previously announced JORC indicated resource of 32,000 tonnes @ 5.3% copper and 8% zinc remaining at the base of the old Whundo open pit (Figure 1). This has the potential to generate revenue from the production of an estimated 1,700 metal tonnes of copper and 2,560 metal tonnes of zinc which has a combined gross metal value at current prices of approximately $14 million. This would be in addition to the revenue received from West Whundo. “As the Radio Hill operation continues to improve and along with the mill upgrade, debt reduction, unhedged sales at attractive prices, and the development of the West Whundo Copper project, Fox is well placed for an exciting 2006. I would like to thank and acknowledge the excellent work put in by the operations, exploration and staff this year. The Board of Fox would also like to thank our shareholders for their continued support.” Don Harper, Managing Director said.
Figure 1 – Old Whundo Pit Copper has been mined from the Whundo Pit (Figure 1), 300 metres east of West Whundo intermittently since 1911, with the most recent operations ceasing in 1976. Total production from this deposit was 12,000 tonnes of direct shipping supergene ore grading 22.3% copper. The largest mining operation was by Whim Creek Consolidated NL in 1976 when 6,746 tonnes of 27.4% direct shipping copper ore was produced from a supergene ore shoot at Whundo equivalent to $11 million at current copper metal prices. ABOUT FOX RESOURCES LTD NICKEL, COPPER & ZINC – Radio Hill, Sholl, Ruth Well and West Whundo Fox is a Top Ten Australian nickel sulphide producer which operates the Radio Hill Mine, located near Karratha in W.A. Fox’s nickel and copper concentrate production is shipped monthly to China’s largest nickel producer, Jinchuan Limited. A feasibility study has commenced into mining and heap leaching of the disseminated nickel resources at Radio Hill and the surrounding Sholl deposits. These deposits contain 40,000 tonnes of nickel and 50,000 tonnes of copper and on successful completion of the study, Fox aims to commence production in the second half of 2007. The West Whundo project has a JORC compliant resource of 894,000 tonnes at 2% copper, 1.4% zinc, and 3.3 g/t silver. GOLD – Star of Mangaroon, Four Ounce Show, and Radleys gold deposits The Star of Mangaroon Gold Mine is located 170 km north of Gascoyne Junction and 250 km northeast of Carnarvon, in the Gascoyne Mineral Field. The deposit was discovered in 1956 with underground production between 1960 and 1983 of 7,464 ounces of gold from 5,357 tonnes of treated ore (average grade of 34.8g/t gold). Fox holds the lease on which the deposit is located, as well as a surrounding lease application giving Fox a tenement holding of 65 km2. Fox is currently assessing joint venture opportunities. The Four Ounce Show and Radleys gold deposits are situated on a mining lease approximately 12 km from the Radio Hill Mine in the Pilbara. This tenement hosts a number of gold-bearing systems where previous exploration outlined a preliminary resource in excess of 36,000 ounces to a depth of 50 m. The mineralisation is mainly open in all directions. An additional promising gold prospect is East Well where previous drilling intercepted 2 m at 5.5 g/t gold. Assays of up to 50 g/t gold were obtained from rock chip sampling over a strike length of 800 m. For further details, please contact: Don Harper – Managing Director +61 8 9318 5600 Kevin Kartun, RADAR Investor Relations +61 2 8256 3310 The information in this report that relates to exploration results, mineral resources or ore resources is based on information compiled by Mr Ed Mead who is a full-time employee of the company and is a member of the Australasian Institute of Mining and Metallurgy. Mr Mead has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Mead consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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