06/02/2008 - 10:25

Jinchuan backs Fox on second nickel revenue stream

06/02/2008 - 10:25

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Pilbara nickel explorer and producer, Fox Resources Ltd, has entered into a new strategic offtake agreement with Jinchuan Group Ltd for the sale of a second stream of nickel in concentrate from the company's Radio Hill operations in Western Australia.

Pilbara nickel explorer and producer, Fox Resources Ltd, has entered into a new strategic offtake agreement with Jinchuan Group Ltd for the sale of a second stream of nickel in concentrate from the company's Radio Hill operations in Western Australia.

Jinchuan is China's largest nickel producer and last month announced plans to become an 11 per cent equity shareholder in Fox.

Fox's growing relationship with Jinchuan includes offtake agreements for all the nickel and copper produced from Radio Hill as well as the nickel and copper concentrates from the Sholl B2 Project.

The second stream nickel in concentrate for the new offtake agreement, called "Z con", is a by-product of the higher grade nickel and copper bulk concentrate currently being produced at Radio Hill.

The benefits of the new agreement for Fox are as follows: (1) additional expected increased gross revenue of up to A$500,000 per month at present nickel prices (2) increased overall nickel recovery (3) increased nickel metal production, and (4) increased metal sales.

Managing director Don Harper said the offtake agreement made a lot of sense for the company in addition to representing a second nickel revenue stream.

Fox also has the advantage of leveraging off its current transport logistics, storage infrastructure at the Port of Dampier and existing shipping arrangements to Jinchuan.

 

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