Shares in Fox Resources Ltd have surged over 10 per cent today after announcing it had signed an offtake agreement with Jinchuan Group Ltd in Shanghai, China, for all copper concentrate sales from its West Whundo copper-zinc project.
Shares in Western Australian-headquartered diversified resources company Fox Resources Ltd have surged over 10 per cent today after announcing it had signed an offtake agreement with Jinchuan Group Ltd in Shanghai, China, for all copper concentrate sales from its West Whundo copper-zinc project.
Jinchuan has also provided $4 million as a pre-payment for sales from West Whundo through a financing agreement with Fox.
Fox has a current life-of-mine offtake agreement with Jinchuan, for all nickel and copper concentrate sales from the Radio Hill operations. The expansion of the relationship with Jinchuan now includes the West Whundo offtake copper concentrate agreement.
Jinchuan Group is a large integrated non-ferrous metallurgical and chemical engineering enterprise engaged in mining, concentrating, metallurgy and chemical engineering.
Earlier this month, the company intersected 22 metres of sulphides, including visible copper and zinc sulphides, at its Ayshia zinc prospect near Karratha in WA's Pilbara region.
At market close, shares in Fox were up 7.5 cents to 78 cents.
Below is the full announcement:
FOX STRENGTHENS RELATIONSHIP WITH CHINA'S JINCHUAN GROUP
Signs $4M Project Funding & Copper Agreement
Fox Resources Limited ("Fox") (ASX code FXR) today announced that it has signed an offtake agreement with Jinchuan Group Limited ("Jinchuan") in Shanghai, China (Figure 1) on 22 May 2006, for all copper concentrate sales from the Company's West Whundo Copper-Zinc Project.
Jinchuan has also provided A$4 million as a pre-payment for sales from West Whundo through a financing agreement with Fox.
Fox has a current life-of-mine offtake agreement with Jinchuan, for all nickel and copper concentrate sales from the Radio Hill operations. The expansion of the relationship with Jinchuan now includes the West Whundo offtake copper concentrate agreement.
Fox's Managing Director, Mr Don Harper, said the new West Whundo offtake agreement's terms, including payable terms and pricing, are excellent in the current market.
"We are delighted with the strengthening of this important existing relationship with China's largest nickel producer Jinchuan Group," said Mr Harper. "Jinchuan's support in the form of an offtake agreement and provision of funding to kick start the West Whundo Copper-Zinc Project is seen as a vote of confidence in Fox," he said.
Jinchuan confirmed its commitment to offering technical support to assist Fox in developing the Radio Hill and Sholl disseminated nickel and copper resources.
Mr Li, President of Jinchuan, commented "We are prepared to move shoulder to shoulder in partnership with Fox Resources."
Fox's March 2006 quarterly report highlighted that the West Whundo Feasibility study delivered an open pit Ore Reserve which contains 8,000 tonnes of copper metal. Additionally, the underground Scoping Study delivered an additional target mineral inventory of 3,700 tonnes of contained zinc metal and 1,300 tonnes of contained copper metal. The first unhedged copper ore at West Whundo remains on schedule to be produced in June 2006.
Fox will announce an exploration update for its other projects next week.
ABOUT FOX RESOURCES LTD
Fox Resources Limited listed on the ASX in April 2002 and has been active in the Pilbara since 2002. Fox is the Pilbara's only nickel producer. The Company is currently operating the Radio Hill Nickel Mine 45 km south of the township of Karratha in Western Australia and is a top ten nickel sulphide producer in Australia.
Fox produced nickel and copper concentrates which are sold to China's largest nickel producer Jinchuan Group Limited. The Company is also actively exploring for nickel, copper and zinc on its 1,000 km2 of surrounding tenements with excellent success to date. Fox's Ayshia Zinc project has delivered excellent drill results confirming the Company has a prospective zinc project.
ABOUT JINCHUAN GROUP LIMITED
Jinchuan Group Limited is a large integrated non-ferrous metallurgical and chemical engineering enterprise engaged in mining, concentrating, metallurgy and chemical engineering. It produces nickel, copper, cobalt, rare and precious metals and also some chemical products such as sulfuric acid, caustic soda, liquid chlorine, hydrochloric acid and sodium sulfide, together with some further processed nonferrous metals products. The output of nickel and platinum group metals respectively accounts for more than 90% of the total in China.
Jinchuan Group Ltd is the largest producer of nickel cobalt in China, and is honored the Nickel City of China.
Jinchuan Group Limited has an annual refining capacity of 130,000 tonnes of nickel, 200,000 tonnes of copper, 6,000 tonnes of cobalt, 8,000 kilograms of platinum group metals (PGMs) and 1,200,000 tonnes of chemical products.
Figure 1 - Formal signing of offtake agreement with Jinchuan's President Li
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.
