Fox Resources has unfortunately felt the double whammy of the fallout from the Red Kite fund fiasco and its immediate impact upon copper and zinc prices, as well as slightly below forecast December quarter copper production from its new West Whundo copper deposit. We remind Members that these issues are only temporary and we have not altered our positive outlook on the company. We retain our view that Fox is sitting on a potentially world-class base metals province at Radio Hill in Western Australia.
-------------------------------------------------------------------------------- "Quarterly copper production was below forecast due to treatment of higher levels of oxide ore that affected recoveries."<
In the year between December 2005 and November 2006, Fox rallied more than 750%, achieving an all-time high of $1.97.
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Any stock would struggle to sustain such a rapid pace of gain. Accordingly, the recent correction in prices should not come as a surprise.
As we pointed out in our CBH Resources report, zinc and copper companies have felt the wrath of investor selling over the past few days, as the market digests the fallout from the losses by US metals hedge fund, Red Kite.
Fox announced a solid December production report in our view.
We will be speaking this week with the company's management to gain a better understanding the impact this additional production will have on its earnings and to provide a more detailed update.
FXR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
