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Fox Marble: New Quarry Rights Obtained at Drini

Contributed by Fox-Davies Capital

Fox Marble announced that it has signed an agreement to acquire rights to extract marble from a quarry in the west of Kosovo, which is adjacent to the Company's producing red marble quarry at Cervenilla.

The agreement has been signed with Drini Company Sh.p.k, a Kosovan business that has been using the Drini quarry for aggregates extraction. Under the terms of the agreement, Fox Marble has the rights to extract marble from the 2.5 hectare site for a 20 year period. Although the underlying licence runs until 20 August 2013 it is expected to be renewed without difficulty. Fox Marble will pay a royalty of €20 per m3 extracted.

This is positive for the Company as it can increase production of blocks for no further capital outlay whilst it resolves its other licensing issues. The Drini quarry contains a similar quality of grey marble as the disputed Verrezat quarry, but it should be noted that the €2,100 per m3 market price quoted in the announcement is for processed slabs rather than extracted blocks. Until the Company's own processing plant is up and running in 4Q'13, it will only produce blocks. Based on the prices given for Verrezat in the company's admission document, this should be priced somewhere between €200-€400 per

As we commented earlier in the week Fox Marble also extracted its first three blocks of high quality red marble from its Cervenilla quarry which were processed at Carrara in Italy with the sample slabs sent to potential customers. Once the snow clears it will only take a few weeks for the company to start

Whilst hugely encouraging and positive, we are still waiting for further clarity on whether the four licenses Fox Marble had annulled in December will be reinstated as the company is currently pursuing legal remedies.