Chasing record copper prices, Western Australian nickel/copper producer Fox Resources has launched a bold, fast-track plan to switch its Radio Hill plant near Karratha in the Pilbara to handle about $50 million of high-grade copper ore it has uncovered nearby.
The company has defined a 156,000 tonne high-grade supergene zone within an initial 926,000t copper, zinc, silver resource at its Whundo and West Whundo deposits.
The importance of this high-grade zone is that it is mostly direct shipping ore, which requires minimal crushing before being trucked the short distance to Dampier for shipping to China’s largest nickel/copper producer, Jinchuan.
Another bonus is that the supergene resource is just 20 metres below the surface, requiring basic, low cost, selective open cut mining to get it out.
While the high-grade zone has not yet been fully evaluated, it could produce about 8,000t of copper, worth more than $47 million at current prices.
Fox managing director Don Harper told WA Business News the whole zone could be mined in three months from March next year.
The company is already earning about $3.2 million a month from the production of 2,000t of nickel and 600t of copper.
Mr Harper said he expected this to continue to early next year, when the Radio Hill mine would be upgraded to handle the supergene copper ore.
This would be done in tandem with a feasibility study into mining and heap leaching the nickel resources at Radio Hill and the surrounding Sholl deposits, which contain 40,000t of nickel and 50,000t of copper, and an in-ground value of $296 million and $697 million respectively.
Following the successful completion of the feasibility, Fox plans to begin heap leach production in the first half of 2007.
Mr Harper said there was also excellent potential to increase the resource base through the testing of recently identified geophysical anomalies.
Given an upgrade in resources, the company has the option of more than doubling the Radio Hill plant’s capacity to 600,000t/year at a cost of between $2.4 million and $4 million.
Fox listed in 2002 and its shares hit a 52-week high of 59 cents in April this year before slipping to 24 cents in October and returning to current levels around 30 cents.
