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Fox Resources In Partial Sale Of Mt Regal Tenement

Fox Resources (ASX: FXR) has successfully negotiated two new separate agreements for the sale and transfer of a non-core portion of its Mt Regal tenement to Hanson Construction Materials and Archipelago Nominees.

Both Companies are established quarry operators in Karratha, Western Australia.

Importantly, the parcels of land involved in these transactions will not interfere with Fox's exploration efforts at Mt Regal in terms of the search for gold and base metals, and Fox retains the mineral rights.

Bruce Garlick, chief executive officer, said: "The total value of the contracts is $1.16 million. To date $400,000 has been received with the balance due once the mining leases are transferred to the respective parties.

"Fox will also receive a royalty payment for all material sold once operations commence."

These new agreements follow on from the original contract entered into with Archipelago in August 2012, and the memorandum of understanding with Hanson.

The decision to sell the portion of the Mt Regal tenement covering the quarry operations followed a review process under which Fox identified that the part sale represented a good opportunity for the company to generate funds from under-utilised assets.

Mt Regal quarry operations

There is a number of existing quarry operations already established within the Mt Regal tenement due to it containing a reliable source of suitable material for quarrying to meet the demands of the construction boom already underway in the region.

The Mt Regal tenement is ideally located for quarry operators as it is only 10 kilometres from Karratha.

Focused on Bundaberg coal

Fox has begun its first drilling program at the Bundaberg Coal Project in Queensland - adjacent to a hard coking coal discovery by International Coal (ASX: ICX) and partner Gina Rinehart's Hancock Prospecting subsidiary.

Seven holes will be drilled in a 15 kilometre long corridor that has demonstrated potential to host a coking coal deposit in the order of that discovered recently by the International Coal/Queensland Coal Investments Joint Venture.

Fox also has interests in Western Australia's Pilbara region through the Mount Oscar joint venture, where an exploration program includes a fully funded $1.8 million program for magnetite at Mount Oscar, and $320,000 for gold at White Quartz Hill, commencing in mid-May 2013.

The company held around A$1.04 million in cash at the end of the March 2013 quarter.

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