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Fox Marble rallies on new quarry deal in Kosovo

Quarrying of grey marble expected to start as soon as winter weather improves.
Fox Marble rallies on new quarry deal in Kosovo

Fox Marble (LON:FOX) has acquired the rights to extract marble from a quarry in the west of the country, close to its red marble quarry at Cervenilla.

The deal has been struck with Drini Company, a Kosovan business that has been using the Drini quarry for aggregates extraction.

Under the terms of the agreement, Fox Marble has the rights for 20 years to extract marble from the 2.5 hectare site, which it says is of good quality, with sufficient quantities for commercial exploitation.

Fox is already focused on marble in Kosovo, but suffered a setback in December when permits for four of its five quarries were withdrawn.

The company said its efforts to remedy the licence situation are continuing and it is pursuing its legal remedies in accordance with the law on mining and minerals in the country.

At Drini, quarrying marble will start when weather conditions ease. The market price of a processed cubic metre of grey marble is €2,100. Under the agreement, Fox Marble will pay a royalty of €20 per cubic metre extracted from the site to Drini Company.

The Drini quarry contains a similar quality of grey marble to Fox Marble's Verrezat quarry, one of those where the licence is currently in dispute.

Fox Marble added that the chain of title to the Drini quarry has been confirmed by Fox Marble's lawyers in Kosovo and the exploitation licence is in good standing.  The underlying licence runs until 20 August 2013 and is expected to be renewed in the ordinary course.

Chris Gilbert, Fox Marble’s chief executive, said: "We are very pleased to acquire the rights to the Drini quarry, where we can begin to extract grey marble following the onset of snow free conditions. The Drini quarry is part of the same marble deposit as Cervenilla, where we have already extracted high-quality red marble."

Broker Fox Davies said the Drini deal is a positive for the company as it can increase production of blocks for no further capital outlay.

The broker added that the market price is for processed slabs rather than extracted blocks, which will be produced until the company’s own processing plant is up and running.

Shares rose 6% to 17.95p.

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