Fox Resources has signed a new off-take agreement with China"s Jinchuan Group Limited that allows Fox to sell a bulk concentrate of both nickel and copper to Jinchuan.

This is an important milestone for Fox as it provides further support for the quality of the Radio Hill underground operation in advance of the restart of its underground nickel mine in the second quarter of this year.

Under the deal, Fox receives payment for all nickel produced (previously, nickel was not paid for in the separate copper concentrate produced); the new off-take agreement is tailored for a lower grade nickel concentrate which allows greater recovery from Radio Hill nickel ores; there will be lower shipping and handling costs and a further strengthening of the relationship between Fox and China's largest nickel producer
Furthermore the second Sala/Bolidon Allis Ball Mill has arrived on site and installation is expected to be completed this week, one month ahead of schedule.

Fox managing director Don Harper says the extra ball mill will make a tremendous improvement to the new nickel operations at Radio Hill.

"The extra ball mill will significantly increase the throughput and recovery at our Radio Hill plant," Don Harper says.

"This is a very positive step for us and meets one of our key objectives for this quarter of improving throughput and recovery rates. This is also a key investment as we prepare the operations to return to nickel production at a time of record-breaking nickel prices."

On the exploration front, a reverse circulation (RC) drill rig has arrived on site at Fox's nickel prospect Razerline. Drilling has started targeting the updip open pit potential of Razerline. Drilling will also target the shallow Anita Lode at Sholl B2 as part of the further conversion of inferred resources to the high confidence indicated JORC category and where a recent high grade nickel intercept of 2.2m @ 3.6% nickel and 2.63% copper from 51.8 metres down hole was reported on the 12 January 2007. The strategy is to achieve a target of 750,000 tonne to 1 million tonne mining reserve at the Anita Lode. This in addition with the Radio Hill reserve of 2.5 years will bring the company closer to achieving its target of a five year mine life for its nickel business.

The drill rig will move to test the Conquest, Sunchaser, Bertram and Carver VTEM anomalies as soon as the tenement approvals are granted at the end of this month. A diamond drill rig is also scheduled mid to late this month, to accelerate exploration of these base metal targets and focus on upgrading the Sholl B2 nickel open pit resource.

"The upgrade of the milling capacity and the commencement of the exploration program will be funded from the recent $10 million capital raising the company undertook through Tricom Equities", Don Harper says.

Fox Resources recently completedits final 3,000 tonne copper concentrate shipment from West Whundo to China's Jinchuan Group.