Fox Resources has repaid a $4 million project loan provided by Sinosteel Australia for zinc concentrates from the West Whundo copper/zinc project in Western Australia.

Sinosteel, China's largest importer of iron ore, provided Fox with a $4 million pre-payment in May 2007 for zinc concentrate sales from West Whundo through an offtake agreement.

Fox managing director Don Harper says: “It is prudent that the company maintains a position of being completely bank and project debt-free. It's encouraging to be able to repay Sinosteel early and we look forward to what 2008 has in store for our next phase of growth.”

In addition to the zinc offtake agreement with Sinosteel, Fox also has an offtake agreement with Jinchuan Group, China's largest nickel producer, for all copper concentrate sales from West Whundo.

The company has completed additional metallurgical drilling as part of the previously announced feasibility study on West Whundo. A causeway was built into the West Whundo pit from where diamond drilling into the stage one primary copper-zinc ore was undertaken. Successful results have the potential to significantly increase the West Whundo mining reserve.

Meanwhile Fox Resources has struck a deal with Pilbara mining giant Rio Tinto to mine the overburden at the Whundo copper/zinc project. The waste from Whundo is being used by Rio to construct a rail siding along its railway from Pannawonica to the Port of Dampier which bypasses the Whundo deposit.

Rio will excavate at no cost to Fox an estimated 300,000 tonnes of waste material and Fox estimates a saving of up to $3 million in mining and rehabilitation costs.

A re-evaluation is underway of the economic upgrade from the Whundo open pit, which contains 11,000 tonnes of copper and 8000 tonnes of zinc metal.

www.foxresources.com.au