Copper producer, Fox Resources Limited is reassessing the potential of its Radio Hill nickel deposit in Western Australia in light of the current sustained strong prices globally for nickel..

Fox managing director Don Harper says under the current global price strength for nickel, it is opportunistic for Fox to re-assess its nickel holdings in parallel with its copper mining and processing strategies in Western Australia including with Fox's alliances with its China stakeholders.

Don Harper says although the company had converted to copper production in July this year, it had started "again doing the numbers" on its ongoing nickel assets.

"If we get to a point total throughput at our mill can be expanded to exceed around 1 million tonnes per annum, that level of processing potentially allows a reversion to nickel production," Don Harper says.

"Radio Hill, near Karratha, has known current contained nickel resources of 10,320 tonnes including an indicated resource of 1.29 million tonnes grading 0.8% nickel and 1.1.% copper.

"Around it in close proximity are the Sholl, Betram and Zodiac nickel deposits and prospects which themselves are close to our key Whundo copper-zinc development and mining operations.

"Electro-magnetic conductor results on Zodiac have yielded five strong conductors and we plan to start drilling these within three weeks to see what is there. All five conductors are in a highly supercharged zone."

Don Harper says that having upgraded the Radio Hill processing plant to a throughput rate of up to 500,000 tonnes a year capacity for the current copper operations, the mill should generate the strong cashflows enabling Fox to consider doubling its capacity.

"We would expect to make a decision re any resumption of nickel mining and processing at Radio Hill, during the current December quarter," he says.

Fox acquired the Radio Hill mill for $975,000 and started nickel production there in 2004, producing 3653 metal tonnes of nickel to June this year before switching to copper production because of better returns.

The company also owns the recently acquired Elizabeth Hill treatment plant 16 kilometres south of Radio Hill.

China's largest nickel producer, the Jinchuan Group Limited, has offtake agreements with Fox for West Whundo copper production and has provided pre-production finance of Aus$4 million for the project, including metallurgical testwork.