Fox Resources Limited is pleased to announce the signing of a non-binding Memorandum of Understanding with Pilbara Minerals Limited in relation to the development of 10 of Pilbara’s 14 exploration tenements in the West Pilbara region of Western Australia. The two companies will now work to finalising a formal farm-in agreement and establishing a joint venture to carry out exploration activities within the tenements, which are considered to be prospective for base metals, platinum group elements and/or gold mineralisation. A map of the tenements is below.

Under the proposed farm-in agreement and joint venture, Fox Resources will acquire up to an 80% interest in the tenements, in return for carrying out extensive exploration activity. The earn-in program will take place over three stages, commencing early 2013 and the financial terms are as follows: Fox will make an upfront cash payment of $150,000 to Pilbara Minerals to earn 40%, and the remaining 40% will be earned by Fox in three stages over a period of three years for yearly expenditure by Fox of $565,000 in each of the first two years and $839,000 in the third. Mr Bruce Garlick, Chief Executive Officer of Fox Resources, said: “Establishing a joint venture to drive the development of these assets is a great opportunity for Fox, given the proximity of the projects to Fox’s current landholding in the Pilbara.” Fox will serve as the manager of the joint venture.

The initial earn-in is subject to a number of conditions, including Fox completing due diligence in respect of the tenements, the finalisation of a binding farm-in and joint venture agreement and the companies agreeing to an initial exploration work program and obtaining all necessary regulatory and governmental approvals, including any approvals that may be required under the ASX Listing Rules by ASX following ASX’s consideration of the transaction. The two companies intend to finalise the binding farm-in and joint venture agreement by 31 January 2013.