Fenix Resources (ASX:FEX) is considering diversifying into other commodities in the Mid West region of Western Australia once Beebyn-W11 comes online as its third operational iron ore mine in the region.
Speaking to Mining.com.au on the sidelines of the Diggers & Dealers Mining Forum in Kalgoorlie, Executive Chairman John Welborn describes Fenix as an “ASX-listed, profitable, dividend-paying iron ore miner with an exciting growth story in the Mid West region of Western Australia”.
Welborn flags the company’s Iron Ridge project as the “highest grade iron ore mine on mainland Australia”, which is running about 1.5 million tonnes per annum. However, the Executive Chairman says there is scope to potentially look at adding other commodities to its portfolio.
“A bit of an easy giveaway that we started as a very single-purposed exploration and development company focused on the Iron Ridge deposit. There’s lots of commodities in the Mid West that we’re interested in – I’m also convinced that the two most obvious commodities that work and have worked for more than 100 years in the Mid West is gold,” Welborn tells this news service.
“There are other companies doing very well out of that in our area and the iron ore story is fascinating. It’s what I spoke about yesterday (5 August 2024). The history goes back to discovery in 1870. Mount Gibson have done 50 million tonnes. We’ve inherited their port infrastructure; their rail infrastructure and we’re looking to unlock the value and monetise them. So, stay tuned for more growth.”
On 25 July, Fenix reported the Feasibility Study findings for its Beebyn-W11 Project located in the Mid West region of Western Australia. Fenix previously announced a decision to restart mining at its second mine, Shine.
Welborn says Beebyn-W11 will be a low capex project that will generate strong financial returns. It will be developed employing conventional open pit mining.
The project will be funded through cash reserves, as well as a portion of the haulage fleet that will be funded via existing and new debt facilities.
Based on forecasted C1 cash operating costs of $77.5/wmt (US$50.40/wmt) and an assumed 62% Fe index price of $153.85/t (US$100/t at a foreign exchange rate of US$0.65 per A$) the project is expected to generate annual EBITDA of $47.9 million.
Estimated initial pre-production capex is $22.9 million, with sealing of the road train haul road cost of about $3 million being deferred until post start of production, for a total capital investment of $25.9 million.
Fenix is progressing with project execution work and approvals, anticipating all regulatory and environmental approvals to be received during calendar year 2024, to enable first production at Beebyn-W11 in early 2025.
The company is currently progressing key works required for the execution of the Beebyn-W11 Project, including Iron Ridge village expansion detailed design and approvals; heritage survey reports (anticipated August 2024); baseline water sampling; detailed engineering and design of the road train haul road; and engineering and design of the mine site.
The Feasibility Study reveals a “high‐grade, high-quality project” that provides strong returns over life of mine (LOM) with first production expected in early 2025 and an annual production profile of 1.5 million dry metric tonnes per annum.
The maiden ore reserve estimate for Beebyn-W11 is 10Mt (dry basis) at an average grade of 62.2% Fe and includes 8.3Mt in proven and 1.7Mt in probable ore reserves.
“We spent $15 million building Iron Ridge, and we generated more than $200 million of operational cash flow. We paid back more than $65 million in dividends, and I mentioned we’ve got $80 million in cash,” Welborn tells Mining.com.au.
“It’s a very successful and very quick return for our shareholders. That’s what we’re looking to achieve with Beebyn and Shine and other projects that we’re looking at.
“We’re not an exploration company – we’ve got operating infrastructure, and we’re very, very disciplined and focused around very quick and very significant return on investment. We’ve been in iron ore, we are at the moment purely an iron ore company (but) I think we will end up diversifying.”
Fenix expects to start mining Beebyn in early 2025.
Beebyn-W11, which is located 508km from the Geraldton Port and 20km from Fenix’s existing Iron Ridge Mine, is based on a direct shipping ore (DSO) operation.
Ore will be crushed and screened on site and separated into lump and fines product before being trucked to the Geraldton Port.
Fenix’s wholly owned logistics subsidiaries Newhaul Road Logistics and Newhaul Port Logistics will provide haulage logistics and port services, with material to be exported through the company’s existing infrastructure at the Geraldton Port.
The Beebyn-W11 project is located within the Murchison Domain in the Yilgarn Craton in Western Australia.
Write to Adam Orlando at Mining.com.au
Images: Fenix
