Fox Resources Limited has completed a placement of 8 million shares to raise $10 million.

Proceeds from the placement will predominantly be used to underpin Fox"s return to nickel production in the second quarter of 2007, as the company transitions from a successful explorer to an emerging regional nickel producer and base metals producer.

In particular, funds raised together with Fox's existing cash flow from current production will provide development funding for its nickel projects (Radio Hill, Sholl B2, Razerline,Ruthwell) within a 15km radius of the Radio Hill processing plant; contribute towards the development of its five new base metal VTEM targets (Sunchaser, Conquest, Bertram, Carver and Zodiac) within a 15km radius of the recently acquired Elizabeth Hill processing plant; provide funding for the newly-acquired skid mounted ball mill to upgrade the Radio Hill milling capacity to enable additional throughput and increased recovery rates for nickel production.

The balance of funds raised will be utilised for ongoing intensive exploration programs in the region and for general working capital purposes.

Fox's copper and zinc production operations are currently based at Radio Hill, processing near-surface ore from its West Whundo copper-zinc mine. The plan is to mine the open pit down to a depth of 45 metres and gear up for a return to nickel production in the second quarter of 2007.

Commenting on the current exploration program and associated capital raising, Fox managing director Don Harper, says, "The injection of capital positions us very well for the future - we are embracing a strengthening nickel price and accelerating our strategy to build a nickel business around Radio Hill and a base metals business at Elizabeth Hill."

"We are very pleased with the outstanding institutional interest in our placement which endorses our new nickel strategy and the work completed by our team to date," he said.

"It's a new Radio Hill - the plant now has the float capacity and will soon have additional milling capacity to capitalise on better recovery rates and on the strong commodity prices that wasn't available to us eight months ago.