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Sydney, Jan 11, 2008 (ABN Newswire) - Pilbara nickel explorer and producer, Fox Resources Limited (Fox) (ASX: FXR) is pleased to announce that China's largest nickel producer, Jinchuan Group Limited (Jinchuan), has entered into a strategic agreement to take an equity stake in the Company.
Under the agreement, Jinchuan will subscribe for 18,800,000 fully paid ordinary shares in Fox at a premium issue price of A$0.95. As a result, Jinchuan will own 11% of the issued shares in Fox.
Jinchuan will be issued a further 8,000,000 attaching options exerciseable at A$1.20 expiring 12 months after the issue of the 18,800,000 fully paid ordinary shares.
The funds raised from the issue will be applied to development of the Company's nickel projects, process improvements to the Radio Hill mill and the acceleration of nickel exploration on the 3,000km2 of tenements accessible to Fox.
On finalisation of the initial share issue, a Jinchuan representative will be invited to join the Board of Fox Resources Limited.
Fox Resources Chairman, Mr Terry Streeter, said the subscription of shares at a premium is a major endorsement of Fox's prospective land holdings and operations in the Pilbara.
"We have been supplying Jinchuan for over three years with nickel and copper from our Pilbara operations and believe this expanded relationship is a great win not only for our two companies, but our collective shareholders," he said.
"We welcome Jinchuan as the most appropriate alliance to maximise shareholder value," said Mr Streeter.
"Fox has the potential to become a long-term, quality supplier of nickel and copper concentrates and we are delighted to have Jinchuan as a significant shareholder."
The Agreement is subject to and conditional upon statutory approvals by the Provincial Government of Gansu Province and the Central Government of the People's Republic of China.
