+++++++++++++++++++++++++ STAR OF MANGAROON GOLD PROJECT - ACQUISITION
The Company is pleased to announce 100% acquisition of the Star of Mangaroon gold mine, which includes 65 square kilometres of the surrounding Mangaroon Goldfield, located 200 kilometres south west of Paraburdoo in Western Australia.
The Star of Mangaroon Mine was discovered in 1956 and produced 7464 oz of gold from 5357 tonnes of ore at a grade of 43.19g/t Au between 1960 and 1983 and was the largest gold producer in the Gascoyne Mineral Field.
* Limited drilling in 1987 and 1994 outlined a measured and indicated resource to around 50m vertical depth of 46,490 tonnes grading 17.2 g/t Au for 25,709 oz Au. The in-situ value of this resource at todays gold price of $572.85 (on 04/06/2002) is $14.7 million.
* The Star of Mangaroon resource remains open at depth and along strike.
* High grade gold mineralisation has been identified by prospecting and sampling over a strike length of 3.5 to 4 kilometres trending in a NNW direction from the Star of Mangaroon mine. Results of up to 373 g/t Au (12 oz/tonne Au) from shallow old workings have been obtained from this work. No drilling is evident in this area.
* Several other gold targets have been identified within the project area over a total strike length of 15 kilometres.
* The Mangaroon Goldfield occurs in Proterozoic rocks identical in age to many other major gold producing regions of Australia, eg Granites-Tanami, Tennant Creek, Pine Creek, Peak Hill and including Newmont's 5-6 million oz Callie deposit. The recently discovered and developed Paulsens and Paraburdoo gold mines are 150-200 kilometres NE of the Star of Mangaroon mine in equivalent age (though less metamorphosed) rocks.
The terms of acquisition is subject to shareholder approval the issue of 3 million fully paid ordinary shares in Fox Resources Limited (FXR) and 3 million free attaching 31 January 2006 20 cent options. The options will have the same terms and conditions as the bonus options issued to shareholders. The vendor retains a royalty of $5.00 per ounce of gold mined.
STAR OF MANGAROON SIGNIFICANT REVERSE CIRCULATION DRILLING RESULTS
The Company has also agreed to acquire 100% of the Jasper Queen mining centre, which consists of a granted mining lease located 18 km east of Cue in the Murchison Mineral Field of Western Australia.
The mining Lease was granted on 14 September 1992, and covers an area of 100 ha. The lease hosts the historic Jasper Queen Gold Mine, the site of the original discovery in the region. At the Jasper Queen historical mine, recorded production amounts to 1,022 ounces of gold produced from 611 tonnes of ore. Mine development reached a maximum depth of 45 meters. A privately owned CIP plant commissioned within 200 meters of the Jasper Queen mineralised zones. The former Westgold's decommissioned CIP plant is located 5km east and Harmony's Big Bell operation is approximately 40 km west.
RAB drilling has been carried out by the previous tenement holders but was limited to relatively shallow depths (approx 20-30m) and though gold anomalism was encountered it was not until 3 RC holes were drilled in April 2001 (MRC01 to 03) that evidence of the degree of weathering and leaching became apparent. Each of these 3 RC drill holes encountered significant gold mineralisation as follows.
HOLE NO EAST NORTH DEPTH FROM TO INTERVAL GRADE (m) (m) (m) (m) (g/t)
MRC 001 1920 1000 74 46 50 4 7.8 60 70 10 4.2
MRC 002 1920 1030 75 12 22 10 1.2 32 44 12 2.4
MRC 003 1918 1055 56 48 50 2 7.6
It is expected that drilling will commence on the Jasper Queen lease immediately after completion of the drilling at Fox's Cuddingwarra lease, which was announced last week.
The Jasper Queen program will consist of approximately 12 holes (1000m) mostly testing strike and depth extensions of the previous high-grade gold intersections encountered in MRC 001 - 003. The aim of this drilling will be to delineate high-grade ore suitable for open cut mining.
The terms of acquisition of the 100% interest is the issue subject to shareholder approval of 850,000 fully paid ordinary shares in Fox Resources Limited (FXR) and 850,000 free attaching 31 January 2006 20 cent options. The options will have the same terms and conditions as the bonus options issued to shareholders. The vendors retain a $1.50 per tonne of ore mined royalty.
BONUS ISSUE OF OPTIONS
The Directors have resolved to reward shareholders for their support of the Company and to provide an incentive for their continued support by the issue of options for no consideration on the basis of 1 option for every 4 shares held on the record date. The options will be exercisable at 20 cents and expire on 31 January 2006.
It is proposed that the options be issued through the issue of a prospectus. Further details regarding the record date will be provided on the lodgement of the prospectus. Application will be made to the ASX to list the options.
CAPITAL RAISING OPTION PLACEMENT
The Company intends to raise approximately $195,000 (before costs) through the issue of up to 9,750,000 options at 2 cents per option. The options will be issued at the discretion of the directors. These options will have an exercise price of 20 cents each and an expiry date of 31 January 2006. The options will have the same terms and conditions as the bonus options issued to shareholders.
The issue of securities will provide funds to strengthen the financial position of the company to provide working capital for the conduct of the company's current and future activities, including funding the exploration of the Star of Mangaroon Project, the Jasper Queen Project and Fox's other exploration expenditure commitments.
It is proposed that these capital raisings be placed through the issue of a prospectus. Application will be made to list the options on the ASX.
B R Matich MANAGING DIRECTOR
FXR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
