Fox announces it will reopen Radio Hill at Karratha.
Titan made a net of $50m in 4 years but blew most of it up in its bio-heap technology.
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HIGHLIGHTS
* Fox acquires Radio Hill nickel/copper sulphide process plant and heap leach operations
* Fox secures nickel reserves and resources for future mining operations, Titan retains 1% royalty on nickel produced
* Radio Hill acquisition to transform Fox from explorer to producer
* Morning Star high grade gold intersected 10 metres @ 20.46 grams/tonne from 49 metres
* Star of Mangaroon high grade gold values of up to 120 grams/tonne over a strike of 6 kilometres
* Shareholders to receive free option for every four shares held
MORE TO FOLLOW
Part B (entered 05-Aug-2002 07:46 am) FOX RESOURCES LIMITED 2002-08-01 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ RADIO HILL OPERATION
FOX ACQUIRES RADIO HILL NICKEL MINE
Fox has finalised an agreement with Titan Resources NL ("Titan") to acquire the Radio Hill nickel/copper sulphide process plant, 35km south of Karratha in the West Pilbara region of Western Australia. The Company also acquires all associated heap leach operations, infrastructure and mining leases.
Titan has produced approximately 45,000 tonnes of nickel concentrates per annum from the Radio Hill operation containing nickel, copper, cobalt and palladium metals. The plant contributed $37 million in revenue for 2001.
Titan retains the right to the disseminated nickel sulphide reserves over the currently mined Radio Hill tenement, however, the Company has secured an option over these reserves, as well as an option over the nickel sulphide resources from Titan's Mt Sholl tenements.
The Company has also entered into a joint venture agreement with Titan over these and other regional tenements.
These agreements increase the Company's substantial land holding to almost 1000 square kilometres, including 12 granted mining leases in the Karratha area. This provides further opportunity for the discovery of extensions of nickel sulphide and precious metal resources for future milling and heap leach operations.
FOX NICKEL/COPPER SULPHIDE PRODUCER
The acquisition of the Radio Hill operations is a major development in transforming the Company from explorer to producer.
The Company will immediately undertake a detailed review with the aim to commence heap leach operations of the high grade Whundo copper oxide stockpiles at the Radio Hill heap leach facilities. The Company's objective is to provide cash flow for the growth of the Company and enable the Company to fund its exploration programs. The Company's goal is to generate early term positive cash flow to provide returns to shareholders.
The Company's due diligence review of the plant indicates that a significant increase in mill throughput and flotation capacity can be readily achieved and result in a lower cost production profile, enabling the economic production of the disseminated nickel/copper sulphide reserves and resources, which will substantially increase the mine life of the Radio Hill operations.
The Radio Hill Plant and underground was originally constructed in the late 1980's by Agip Pty Ltd, a wholly owned subsidiary of the Italian State Oil Company at a cost of $45 million. The review of the plant by the Companys independent expert concluded that the plant has been well maintained and is in good operational condition.
RESERVES/RESOURCES AND FUTURE OPERATIONS
* Radio Hill disseminated nickel/copper sulphide reserves of 784,032 tonnes at 0.76% Nickel, 1.04% Copper, 0.05% Cobalt and 0.6 grams per tonne palladium.
* The Mt Sholl disseminated nickel/copper sulphide resources of 2,069,000 tonnes at 0.81% Nickel, 0.87% Copper, 0.033% Cobalt and 0.62 grams per tonne palladium.
* The Whundo deposit includes stockpiles of 31,000 tonnes @ 4% copper and a resource of 2 million tonnes @ 2% copper, 1.3% zinc and 11 g/t silver. There is potential for further discoveries of massive base metal sulphide mineralisation extending over 12 kilometres of strike.
These deposits contain in-situ resources in excess of 22,000 tonnes of contained nickel, 66,000 tonnes of copper, 1100 tonnes of cobalt and 1,750kg of palladium.
The Mt Sholl tenement block also hosts a number of gold-bearing systems including the Four Ounce Show and Radley's where previous exploration outlined a preliminary resource in excess of 36,000 ounces to a depth of 50 metres. The majority of this mineralisation is open in all directions.
An additional promising gold prospect is East Well where previous drilling intercepted 2m @ 5.5 grams/tonnes gold. Assays of up to 50 grams/tonnes gold were obtained from rock chip sampling over a strike length of 800 metres.
The Company tenure also hosts several other important mineralised layered intrusive complexes including the platinum-rich horizons at Munni Munni and nickel copper at Maitland and North Whundo.
The Company also acquired an extensive database that includes regional high-resolution magnetic and electromagnetic surveys, which were flown over the entire Titan project area in late 2000. The survey was designed to accurately map the limits of these layered intrusions and determine new prospective areas and has identified a number of new exploration targets.
The Radio Hill site also provides the Company with offices and other base facilities that provide a regional exploration base to allow to readily evaluate its resource and exploration land holding in the West Pilbara.
RADIO HILL PLANT AND TENEMENT ACQUISITION
An agreement has been finalised with Titan for the sale of the Radio Hill treatment plant and associated infrastructure along with three underlying and associated mining tenements by paying Titan the sum of $925,000. Titan also retains a royalty of 1% of the value of nickel produced from any new discoveries of nickel ore from the mining tenements. The Company will also assume responsibility for future rehabilitation of the Radio Hill site, this is subject to statutory approvals but both parties expect this to be a formality.
OPTION OVER RADIO HILL AND MT SHOLL RESERVES/RESOURCES
In respect of the Radio Hill disseminated nickel sulphide reserves, a cash payment upon exercise of the option of $75,000 plus a 1% royalty on all nickel, copper and cobalt produced. In respect of the Mt Sholl disseminated nickel sulphide resources a cash payment upon exercise of the option of $200,000 plus a 1% royalty on all nickel, copper and cobalt produced. The term of the option is until 30 June 2004.
JOINT VENTURE AGREEMENT
In an associated transaction, the Company has signed a farm-in Agreement with Titan, whereby the Company may earn a 70 per cent equity in seven Mining Leases held by Titan (M47/207, 252, 254, 275 and 347 for all minerals and M47/344-5 for precious metals only) by paying the sum of $50,000 cash and sole funding the next $500,000 of exploration expenditure over the next three years.
WHUNDO AND YANNERY COPPER DEPOSITS
During the quarter the Company announced the purchase of the Archaean volcanic Hosted Massive Sulphide (VHMS) Whundo and Yannery copper-sulphide deposits in the West Pilbara for a cash consideration and a royalty of $1.00 per tonne of ore mined.
MORE TO FOLLOW
Part C (entered 05-Aug-2002 07:41 am) FOX RESOURCES LIMITED 2002-08-01 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ MORNING STAR AND JASPER QUEEN PROJECTS
RC DRILLING
During the quarter RC drilling at Morning Star prospect has confirmed that the Snake Pit area contains high-grade gold mineralisation. RC Hole MSRCOO09 intersected 10m at 20.46g/t gold from 49m. This intercept lies approximately 30m down dip from CDAC230, which also returned a high grade intercept of 13m @ 13.66g/t including 1m at 68.7g/t gold from 13m and 2m at 86.7g/t gold from 21 m. The mineralisation is currently open in all directions and further drilling is recommended.
At Jasper Queen, RC drilling confirmed significant mineralisation along strike in at least three-stacked shear zones. These shears correlate well with a line of shallow old mine workings and remain open to the east.
The RC drilling results prompted a review of all existing RAB drilling data and this has identified an additional six targets that justify following up, markedly enhancing the prospectivity of the mining leases.
SIGNIFICANT RC DRILLING INTERCEPTS
PROSPECT HOLE# NORTH EAST AZI DIP FROM TO WIDTH AU (G/T)
During the quarter the Company agreed to acquire 100% of the Jasper Queen project, which consists of a granted mining lease located 18 kilometres east of Cue in the Murchison Mineral Field of Western Australia.
The purchase of Jasper Queen by Fox is subject to shareholder approval of the issue of 850,000 fully paid ordinary shares in Fox Resources Limited and 850,000 free attaching 31 January 2006 20 cents options. The vendors retain a $1.50 per tonne of ore mined royalty.
STAR OF MANGAROON PROJECT
Highly encouraging results were obtained from a regional rock chip sampling program recently carried out over the Company's Star of Mangaroon project area in the upper Gascoyne region of WA.
High grade gold values of up to 121.24 grams/tonnes gold were obtained from several locations over a strike length of around six kilometres east and west of the historic high-grade Star of Mangaroon gold mine.
Highly anomalous silver and base-metal values accompany gold mineralisation in most places sampled. The best assays included 185.5 grams/tonnes silver, 6.92 % copper and 23.37 % lead.
STAR OF MANGAROON SIGNIFICANT REVERSE CIRCULATION DRILLING RESULTS
During the quarter the Company reached agreement to acquire 100% of the Star of Mangaroon gold mine, which includes 65 square kilometres of the surrounding Mangaroon Goldfield, located 200 kilometres south west of Paraburdoo in Western Australian.
The purchase of the Star of Mangaroon by Fox is subject to shareholder approval of the issue of 3 million fully paid ordinary shares in Fox Resources Limited and 3 million free attaching 31 January 2006 20 cent options. The vendor retains a royalty of $5.00 per ounce of gold mined.
CORPORATE
BONUS ISSUE OF OPTIONS
The Directors have resolved to reward shareholders for their support of the Company and to provide an incentive for their continued support by the issue of options for no consideration on the basis of 1 option for every 4 shares held on the record date. The options will be exercisable at 20 cents and expire on 31 January 2006.
It is proposed that the options be issued through the issue of a prospectus. Further details regarding the record date will be provided on the lodgement of the prospectus. Application will be made to the ASX to list the options.
CAPITAL RAISINGS AND OPTION ISSUE
The Company proposes to:
* raise up to $1.6 million (before costs) through the placement of up to 8 million shares at an issue price of 20 cents per share. The issue will include a free attaching option for every 4 shares subscribed.
* raise approximately $195,000 (before costs) through the issue of up to 9,750,000 options at 2 cents per option. The options will be issued at the discretion of the directors. These options will have an exercise price of 20 cents each and an expiry date of 31 January 2006. The options will have the same terms and conditions as the bonus options issued to shareholders.
* issue a total of 6 million free incentive options to the directors, management and consultants of the Company. The options will be unlisted and have an exercise price of 40 cents each and an expiry date of 31 December 2009.
The issue of securities will provide funds to strengthen the financial position of the Company to provide working capital for the conduct of the Company's current and future activities, including funding the Radio Hill operations and the exploration of the Star of Mangaroon Project, the Jasper Queen Project and the Companys other exploration expenditure commitments.
The Company will seek shareholder approvals in respect to the proposed issue of options and the capital raisings.
B Matich MANAGING DIRECTOR
FXR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
