Fox Resources plans to raise more than $13 million through a rights issue to complement its previous $3.4 million private placement, with funds to be applied to ongoing exploration programs and processing tests.
Fox Resources plans to raise more than $13 million through a rights issue to complement its previous $3.4 million private placement, with funds to be applied to ongoing exploration programs and processing tests.
The announcement is below:
Pilbara-based minerals developer Fox Resources (ASX: FXR) has opened its shareholder entitlement offer to raise up to approximately $13.1 million from the issue of up to approximately 101 million shares at 13 cents per share.
Shareholders are being offered one share plus one free attaching option for every two shares they hold in Fox. The options are exercisable at 30 cents each and expire on 30 November 2010.
Fox Resources Executive Chairman, Terry Streeter, said the Fox Board has a long term positive outlook for steel feed minerals for which Fox Resources is well positioned.
"Fox is particularly well positioned to capitalise on long term commodity demand and the wave of strategic acquisitions and consolidation taking place among the Pilbara miners and explorers."
"As a major shareholder in Fox, I intend to participate in the offer and I anticipate that Fox's other major shareholders will also participate," said Mr Streeter.
Funds will be used to drive ongoing exploration programs at Fox's base metal and iron ore projects in the Pilbara with the intention of increasing Fox's current resource base, as well as to continue promising heap leaching testwork at the Radio Hill nickel and copper mine. The funds will also be used for repayment of creditors and general working capital.
The offer, if fully subscribed, will conclude a $16.5 million capital raising program which commenced in April this year with a $3.4 million share placement. This is expected to significantly strengthen the company's balance sheet and allow it to maintain the momentum of its aggressive exploration and development strategy, which promises to deliver value for shareholders.
Recently commissioned metallurgical test-work has confirmed the potential for a successful heap leaching operation using existing stockpiles and oxide resources from Fox's Whundo and Radio Hill mines.
Fox Resources Managing Director, Bruno Seneque said the potential heap leaching operation represents a low cost opportunity for Fox to produce high value end products.
"If successful, this could provide the basis for a highly profitable five year operation."
"We believe there is also potential to use heap leach infrastructure to treat known sulphide resources at the Radio Hill and Whundo projects in the future," said Mr Seneque.
Fox also continues to progress its Mt Oscar iron ore project. The Company announced an initial inferred magnetite iron ore resource1 of 72.4 million tonnes @ 34% Fe in March this year, less than a year after the tenements were granted. Fox has an exploration target of between 800 million tonnes and 1.2 billion tonnes2 based on the 8km of strike length yet to be drilled along with geophysics, field mapping and reconnaissance by Fox staff.
A scoping study on the Mt Oscar project has been recently completed, with the independent consultants, Mineral Engineering Technical Services Pty Ltd, who completed the report, declaring that the project has a great potential to be a successful project.
The entitlements offer is currently scheduled to close on 14 July 2009.
