Fox Resources Limited announced that the maiden shipment of copper metal in concentrate departed the Port of Dampier in Western Australia for Lianyungang China earlier this week.

The maiden shipment carried 728 tonnes of unhedged copper metal in concentrate valued at A$7 million (gross of smelter charges).

The copper metal in concentrate was mined from Fox's newly commenced West Whundo low cost, high grade open pit. Mill production remains on track to ramp up to an average of 45 tonnes of copper metal per day. Total production from West Whundo has been contracted to China's Jinchuan Group Ltd, China's largest nickel producer.

Due to contracted freight space arrangements 184 tonnes of copper metal in concentrate remained at the Port of Dampier. The next shipment, scheduled for early September, will total an estimated 1,100 tonnes of copper metal in concentrate valued at A$11m, at current metal prices.

The Company reaffirms its production target for the September 2006 quarter of 3,348 tonnes of copper metal in concentrate.

Fox Resources' Managing Director Don Harper said the shipment represented a significant milestone for the Company.

"So far we have delivered this project on time, on budget and both the resource model and recoveries are performing better than expected," Mr Harper said. "Yet while it is a great result, it is really a foundation that allows us to focus on bigger goals which include extending mine life at West Whundo as well as developing our exciting regional Pilbara exploration targets."

As previously announced, the re-optimised pit design at the West Whundo mine indicates the project has a current recoverable metal value of $150 million over a 12 month period. Reverse Circulation drilling is underway around the mine targeting an additional two-year open pit mine life, with results to be released as they become available.

Production from the West Whundo mine also continues to perform better than anticipated with an 11 per cent increase in the ore tonnes mined compared to resource model and a 13 per cent increase in copper grades compared to the resource model.

BHP Billiton, the world's biggest mining company, and a union in Chile met in a bid to settle a strike in its fifth day that has cut production at Escondida, the world's largest copper mine. Copper prices fell.

The two sides, at a meeting this morning, agreed to negotiate during talks this afternoon, according to Pedro Marin, a spokesman for the union, and Illtud Harri, a spokesman for BHP Billiton in London.

"We're willing to work point by point to reach an accord," Marin said by telephone from the city of Antofagasta. "Some points require money, and others don't."

The two sides are resuming negotiations today for the first time since Aug. 8, seeking to resolve a wage dispute that management estimates has slashed production by 60 percent at Escondida. The mine in northern Chile last year accounted for 8.5 percent of all mined copper worldwide.

Prices for the metal dropped 14.80 cents, or 4.1 percent, to close at $3.4765 a pound for delivery in September on the Comex division of the New York Mercantile Exchange. Prices pared a gain for the year to 63 percent. In London, copper for delivery in three months tumbled $305, or 3.9 percent, to $7,570 a ton on the London Metal Exchange.
Talking points

BHP Billiton is willing to reallocate funds in its current offer, Harri said today by telephone. The union wants the company to sweeten its proposal, Marin said.

The union, called Escondida's Workers' Union No. 1, seeks a salary increase of 13 percentage points above the inflation rate, which was 3.8 percent in July, and a bonus of 16 million pesos ($29,531). The union said it wants wages to reflect copper prices that trade at four times their level when the union last negotiated its contract in 2003.

The union last week rejected the company's latest offer to increase wages by 3 points above inflation and pay a bonus of 8.5 million pesos per worker.

Escondida, which means "hidden" in Spanish, produced 1.271 million tons of the metal in 2005, or 24 percent of the copper from Chilean mines. Escondida accounts for 2.5 percent of Chile's gross domestic product, according to the mine's Web site. Chile is the world's largest copper supplier.

BHP Billiton owns 57.5 percent of Escondida. Rio Tinto owns 30 percent of the mine, while a group led by Mitsubishi Corp. owns 10 percent. The International Finance Corp. owns the rest.

Inco Ltd., the world's second-largest nickel producer, may ask Teck Cominco Ltd. to increase its C$19.4 billion ($17.4 billion) hostile takeover bid, threatening a friendly buyout agreement with Phelps Dodge Corp.

Teck Cominco's offer of C$87.24, including C$40 in cash, might result in a "superior proposal," Toronto-based Inco said today in a statement. Inco, the world's second-biggest nickel producer, still rejected the latest Teck Cominco bid and said it supports the Phelps Dodge offer at C$85.67, including C$20.25 in cash.

Inco wants "to get the best price," said David Kratochvil, an analyst at Rochdale Securities LLC in New York. "Both deals are below where Inco is currently trading. I think they are looking to get some kind of a bidding war going."

Record prices of industrial metals have triggered a spate of takeovers among mining companies seeking to increase production. Inco last month failed in an attempt to acquire Falconbridge Ltd., ruining the plan by Phelps Dodge, the world's third-largest copper producer, to acquire both companies in a C$42.5 billion deal, the industry's biggest.

Shares of Inco fell 63 cents to $78.75 in New York Stock Exchange composite trading. They have climbed 92 percent in the past year and reached a record $79.38 on Aug. 4. Kratochvil of Rochdale Securities rates the shares "hold" and doesn't own the stock.

Phelps Dodge, based in Phoenix, rose 58 cents to $86.95. They were up 59 percent from a year ago. Vancouver-based Teck Cominco, the world's biggest zinc producer, declined 48 cents to $71.30. The Toronto Stock Exchange was closed for a holiday.
'Engage in Discussion'

"As permitted by the combination agreement with Phelps Dodge, the board has authorized our senior management to engage in discussion with Teck to determine whether their offer could be amended to result in a superior proposal," Inco spokesman Steve Mitchell said. He declined to comment on the nature or the timing of discussions with Teck Cominco.

Inco said it will seek a court order to hold its shareholder meeting on Sept. 7. Phelps Dodge's offer is subject to winning support from Inco investors with more than half of the shares.

Teck Cominco Chief Executive Officer Donald Lindsay has said he will not be drawn into a bidding contest. The company already owns 8.9 million Inco shares.

The bid for Inco, open until Aug. 16, "is superior to the Phelps Dodge offer," Teck Cominco said today in a statement.

Inco said today in a filing today with the U.S. Securities and Exchange Commission that it will owe Phelps Dodge a termination fee of $475 million should Inco cancel the merger or recommend another bid.

Teck Cominco raised its offer, including 0.5821 of a Teck Cominco share, on July 31. Phelps Dodge increased its bid on July 16. It has 0.672 of a Phelps Dodge share.

"We appreciate the Inco board's reaffirmation of our agreed combination," Phelps Dodge spokesman Peter Faur said in an e-mail.

Russia's OAO GMK Norilsk Nickel is the world's biggest nickel producer by 2005 output. Chile's state-owned Codelco is the largest copper producer, followed by BHP Billiton Ltd.

African Eagle Resources PLC said it has signed an earn-in agreement with Phelps Dodge Mining (Zambia) Ltd (PDMZ), a wholly owned subsidiary of the Phelps Dodge Exploration Corporation, for the exploration and joint venture development of its Ndola Copperbelt project in Zambia.

Under the Agreement, PDMZ will subscribe for AFE shares worth 2.73 mln usd in two tranches, at a 10 pct premium to the market price of AFE's shares.

AFE said it will use 75 pct of the funds on an agreed exploration programme at Ndola and the balance on other AFE projects and general working capital.

PDMZ will gain an exclusive right to earn ownership of up to 70 pct in the Ndola project by making agreed expenditures on further exploration up to and including completion of a bankable feasibility study.

The Ndola licence area is considered highly prospective. The licence occupies a little-explored gap between First Quantum Minerals' Frontier and Lonshi mines in the DRC.