Leederville-based mining company Fox Resources Ltd has recommenced nickel production at its Radio Hill operations, enabling it to meet its offtake agreement with Chinese nickel producer Jinchuan Group Ltd.
Leederville-based mining company Fox Resources Ltd has recommenced nickel production at its Radio Hill operations, enabling it to meet its offtake agreement with Chinese nickel producer Jinchuan Group Ltd.
The full text of a company announcement is pasted below
Fox Resources Limited ("Fox") (ASX code: FXR) is pleased to announce that it has recommenced nickel production at its Radio Hill Operations in the Pilbara region of Western Australia.
While Fox were generating a cash flow from its West Whundo copper-zinc mine, the 2.5 year nickel mining reserve announced on 22 January 2007 at Radio Hill has enabled the Company to switch back to nickel production. The Company can now benefit from record level nickel prices while at the same time prove-up its base metal resources around the Company's second mill at Elizabeth Hill (Figure 1).
Earlier this year, Fox announced that it was conducting a review of its nickel assets to support the development of a dual income business strategy. This review determined the economic viability of treating 89,000 tonnes of low grade nickel-copper ore stockpiled on the surface 150 metres from the Radio Hill mill. This ore is now being processed successfully through the existing mill with an expected ramp-up in production scheduled for early March 2007 when the second ball mill comes on stream.
The first nickel shipment from Radio Hill is scheduled for late March 2007.
The stockpiled material, grading 0.66% nickel and 1.04% copper (previously reported in the Company's 2006 Annual Report) has an estimated total of 587 tonnes of contained nickel and 925 tonnes of contained copper metal. This low grade nickel ore stockpiled on the surface is the starting point for preparations to mining underground at Radio Hill in April 2007.
Significantly, Fox will be producing copper along with nickel in a bulk concentrate. This is supported by the Company's new offtake agreement announced on 19 February 2007 with China's largest nickel producer Jinchuan Group Limited for a bulk nickel and copper concentrate which allows payment for all nickel produced in concentrate.
As previously announced on the 6 February 2007 tenement approvals to begin exploration on Fox's exciting VTEM targets (Figure 2) were granted yesterday. The first target to be drilled is "Conquest" (Figure 3) which consists of two Electromagnetic (EM) conductors and through preliminary interpretation may be consistent with the presence of massive sulphides. The conductors are approximately 80m below surface and the larger of the two conductors has an estimated strike length of 100m and is open to the east and south.
There is a gossan (oxidised sulphides) and a copper-zinc occurrence on the surface in the immediate area of the conductors which may have the potential to lead to another shallow high grade supergene copper discovery similar to West Whundo and Whundo (Figure 1). Reverse Circulation drilling is scheduled to begin next week.
