fyi: fxr scoping study (not feasibility)

SHARES in Fox Resources have jumped this morning after the company released the results of a scoping study at its Radio Hill and Sholl heap leaching projects in the Pilbara, which indicated revenue of $A867 million over a nine-year mine life.

The plan is to bring the project into production in two stages, with the Radio Hill restart to come first followed by the Sholl start-up in year three.

Pre-production capital costs for Radio Hill are estimated at $25 million for annual throughput of 400,000-900,000 tonnes per annum.

In year three, required expansion capital will be $37.45 million.

The combined projects have resources of 12.97 million tonnes grading 0.51% nickel and 0.71% copper for 66,147t nickel and 92,087t copper, but Fox plans to mine 6.17Mt grading 0.59% nickel and 0.78% copper.

Operating costs are expected to be $96.85 per tonne, including mining, treatment, administration and shipping costs, as well as royalties.

The study showed bacterial leaching to be the cheapest and most effective processing option.

Revenues are expected to be up to $96 million per annum, based on metal prices of $US10.26 per pound of nickel and $3.70/lb copper, and a US-dollar exchange rate of 93c.

The company is tipping an operating cash surplus before tax and capital of $A219 million, a net present value of $95 million and an internal rate of return of 39%.

Based on the results, Fox has decided to move to funding options and hopes to receive all approvals before the end of June to begin construction.

Mine dewatering at Radio Hill is continuing to allow the restart of mining.

Shares in Fox jumped 19% or 1.7c to 10.5c