FXR - Fox Resources

[doctorj]

Profit was significantly lower that expected. Lower strip ratios in dec quarter hurt significantly.

Change of site and commodity means that money spent on developing stage 2 has been burnt, pending the eventual return to the site. Upside includes unused capacity at Elizabeth Hill.

 

[kerosam]

Fox Resources is taking a huge beating... not recovering with the rest of the market on the back of last week's news of production at Radio Hill.

damn!

 

[chris1983]

I picked some up today. Get them when nobody wants them. This company is travelling well IMO. They raised 10 million in cash at 1.25

 

[doctorj]

Depends how you look at it. Either they're agile enough to jump aboard what ever is strong or they have the attention span and foward thinking of a gold fish.

 

[chris1983]

Depends how you look at it. Either they're agile enough to jump aboard what ever is strong or they have the attention span and foward thinking of a gold fish.

You dont think it was a good idea to switch to Nickel production? Even to be able to do this has to be a huge plus.

 

[doctorj]

I agree that having the option is great.

Taking that option means that they spent a whole stack of money developing the underground and mining waste for stage 2 thats not going to bare fruit for some time. For a company that still looks to rely on capital raising for its survival in a market where raising funds only looks to be getting harder its a little bit of a worry.

I guess the boys at FXR believed that cost/benefits meant switching was good. I'm still sitting on the fence and left wondering if they manage for next year, next quarter, next month or just next week?

 

[chris1983]

I agree that having the option is great.

Taking that option means that they spent a whole stack of money developing the underground and mining waste for stage 2 thats not going to bare fruit for some time. For a company that still looks to rely on capital raising for its survival in a market where raising funds only looks to be getting harder its a little bit of a worry.

I guess the boys at FXR believed that cost/benefits meant switching was good. I'm still sitting on the fence and left wondering if they manage for next year, next quarter, next month or just next week?

hmm yeah your points are valid. Lets hope this change from copper to nickel works out for them. Its should bring in more revenue due to the price of nickel atm. I thought they were worth a buy due to the price of nickel/strong partners/cash at bank and now bank into production. I think they have been hit quite hard due to the negative sentiment placed on the capital raising and the correction happening at around the same time but true value will shine through. Seems like a sure bet to me as long as it all goes smoothly.

 

[doctorj]

Also the disappointing half yearly wouldn't have been too well received by the market.

Many brokers were expecting a much stronger bottom line.

 

[Halba]

This rates poorly on all criteria. Cash at bank, limited reserves, business model is making quick bucks while the boom lasts. Yet their reserves very limited and their mine life/deposits profile ,grades are not sound enough.

 

[doogie_goes_off]

What rubbish, 2.5 years mine life is common, having two processing plants and the ability to react to market demand is good business sense. Their blue sky targets are high quality. FXR will be there after the boom IMO.

 

[chris1983]

I picked some up today. Get them when nobody wants them. This company is travelling well IMO. They raised 10 million in cash at 1.25

Well it looks to me as if sentiment on this one is turning around. I think its the booming nickel prices taking effect? Whole reason why I decided to jump in.

'The first nickel shipment from Radio Hill is scheduled for late March. The stockpiled material, grading 0.66% nickel and 1.04% copper (as reported in the 2006 annual report) has an estimated total of 587 tonnes of contained nickel and 925 tonnes of contained copper metal.

"This low-grade nickel ore stockpiled on the surface is the starting point for preparations to mining underground at Radio Hill in April 2007," Mr Harper said.
He noted Fox would be producing copper along with nickel in a bulk concentrate.

This was supported by the company's new offtake agreement, announced on February 19, with China's largest nickel producer, Jinchuan Group Ltd, for a bulk nickel and copper concentrate that allows payment for all nickel produced in concentrate."

Fox is targeting a five year mine life for its nickel business (Radio Hill Mill) and a five year mine life for its base metals business (Elizabeth Hill Mill). The existing mining reserve at Radio Hill enabled Fox to swiftly move back into nickel production and benefit from record level prices while at the same time working up its base metal resources around Elizabeth Hill. Fox aims to commence nickel production in the 2nd quarter of 2007.

Management remains very optimistic about longer-term base metal prices as well as the tremendous opportunity to capitalise on the Company’s growing nickel business. Fox is unhedged, debt-free, profitable and committed to its vision of becoming a mid-tier nickel and base metals miner.

*Currently holding FXR and AGM to take advantage of record nickel prices.*

 

[chris1983]

A user on another forum site posted this. Thought its important for FXR holders..probably not only important to FXR holders but other copper producers..but I'm a Fox holder so see the article below.

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RESOURCES
Bloomberg TV

Copper Demand Rises on `Unimaginable' China Growth
By Matthew Craze and Cris Valerio

March 23 (Bloomberg) -- Codelco Executive President Jose Pablo Arellano, who runs the world's largest copper company, said demand for the metal will continue to rise through next year because of ``unimaginable'' new construction in China.

China, the biggest consumer of copper, is ``back in the market'' after record-high prices in May last year forced some manufacturers to slow purchases and rely on their stockpiles, halting the rally, Arellano said. Copper has jumped 27 percent since reaching a 10-month low on Feb. 2.

``They are building cities at an unimaginable rate,'' Arellano, 55, said yesterday during an interview at Codelco's headquarters in Santiago. ``Urbanization in general demands a lot of copper. China is going precisely through that stage of development.''

Codelco, which is owned by Chile's government, previously miscalculated China's role in a copper boom that began in 2002 and saw prices jump 65 cents a pound at the end of 2001 to a record $4.04 on May 11.

Arellano's predecessor, Juan Villarzu, predicted in 2006 that prices would average $1.50 to $1.70 a pound. Prices averaged about $3.06. A year earlier, the company predicted prices would fall.

Arellano, who took over from Villarzu in March 2006, declined to provide a price forecast today. He said strong demand for copper will remain strong for ``at least this year and half of next year.''

Reason for Optimism

``There's reason to be optimistic about this market, particularly when you look at the Asian sector,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``There's been a constant underestimation for demand.''

Copper prices in New York rose to the highest in more than three months yesterday as China's copper imports in February doubled. Inventories in London Metal Exchange-monitored warehouses have declined for five consecutive weeks, while stockpiles on the Shanghai Futures Exchange have more than doubled, signaling increased imports by China.

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This is all looking really good for FOX with their second Ball mill also being installed during record prices for nickel and copper prices on the move again.

"SECOND BALL MILL INSTALLED
The second Ball Mill has now been fully and successfully installed (Figure 1) and is undergoing commissioning in conjunction with the existing mill. It is expected the addition of this mill will increase overall production throughput by 50% to 45 tonnes per hour. As previously announced on 2 March 2007, the low grade nickel stockpiled on the surface is currently being used to
produce a bulk nickel and copper concentrate prior to underground production commencing in early April 2007."

 

[chris1983]

Announcement out. Looking good.

EXCELLENT DRILLING RESULTS UPGRADE SHOLL B2, WHUNDO & AYSHIA

Base metals producer and explorer, Fox Resources (“Fox”) (ASX Code: FXR) today announced positive updates from the Company’s Sholl B2 Nickel Project (“Sholl B2”), Whundo Copper-Zinc Project (“Whundo”) and Ayshia Zinc Project (“Ayshia”). Commenting on the latest drill intercepts, recently appointed General Manager Exploration, Mr. Gus Wolff, explained the strategy Fox will pursue in 2007.

“Fox has the capacity to respond rapidly to changing metal prices and is embarking on an aggressive drilling program to increase the resource base within its holdings in the Pilbara region of Western Australia,” said Mr Wolff.

Full announcement below

http://www.asx.com.au/asxpdf/20070326/pdf/311mmpb73bsthn.pdf

 

[Moneybags]

I picked some up today. Get them when nobody wants them. This company is travelling well IMO. They raised 10 million in cash at 1.25

Well picked Chris.........certainly looks to be turning around as you say.

MB

 

[chris1983]

Well picked Chris.........certainly looks to be turning around as you say.

MB

Thanks Money. It was an easy pick this one. It was hit during the correction..it also retraced due to holders being unhappy with the placement price and then the poor recoveries of their copper in the Dec quarter for 2006. Well they are back in production of copper along with nickel in a bulk concentrate.

Looks good to me when your producing the two metals they will be producing. Its all unhedged . Nickel is hot atm and Copper is climbing once again. More gains will be seen on Fox IMO. Not going to sell just yet..may even hold on for a year.

 

[ozeb]

Trading halt. Any ideas why?? hope its good news..still waiting for price to recover.

 

[chris1983]

Trading halt. Any ideas why?? hope its good news..still waiting for price to recover.

I just got out a day before the halt..did well..if they drop back to under 1.20 with any production problems i'll jump back in.

 

[doogie_goes_off]

OK mining stock traders, time to take note - the drilling of the first ground EM target has produced 36m of massive sulphide = new discovery plus outstanding undrilled targets. Now I have confirmation I am holding fox until there is significant improvement in price or the takeovers start to lurk. There will be small but notable profit this year if Nickel production runs smoothly. Copper price rise care of BHP's shutdown will help. This little gem is starting to shine again and Fox is on the run...

 

[doctorj]

The Fox giveth, the Fox taketh.

Long term positive for the company. Having a number of deposits within close proximity to existing company infrastructure is a huge advantage, but this announcement is nothing new.

EM mapping has shown the target has existed for some time. A single drill core with no mention of grades does nothing but confirm the EM mapping works which they knew already or they wouldn't have paid for it in the first place.

This announcement, to me, looks like an effort to stop the sliding SP. I still reckon there will be a placement of sorts on the way.

 

[doogie_goes_off]

All resource companies try to stop the slide on the share price. Nothing new there. The reason there was a trading halt and the reason they have disclosed the result pre-assays is because they are obligated to report any significant findings to the ASX or people will trade on inside info until the result which will presumably be exciting. It's called continuous disclosure and fox do it better than anyone, pity they don't keep everyone informed when they go to do a placement (they normally do a back room deal and announce it out of the blue). So, in my opinion 36m of "massive sulphide" albeit in two intersections would seem to be significant enough to warrant a trading halt and announcement. Having an EM target IS NOT a sure sign of having sulphide mineralisation. Drilling an EM anomaly and hitting such a wide intersection of "massive suplhide" IS a sure sign, so the assertion that "it was already there" is ill-informed. What this does "prove" is that the EM targets of similar magnitude and form have a good chance of producing massive sulphide mineralisation, something fox has asserted it has a strong record of identifying. Only drilling will tell if this is true, but atleast with this company they will be drilling, not sitting on their hands. In my opinion this will be one of many significant discoveries that fox will make with their no frills locate and drill strategy.