Fenix Resources (ASX:FEX) is developing a new iron ore mine at the Beebyn-W11 deposit, after completing a Feasibility Study which demonstrated the project will provide “strong” returns over a seven-year mine life.
First production is expected in early 2025, with an annual production rate of 1.5 million tonnes per year at an average strip ratio of 2:2.
Beebyn-W11’s maiden reserve estimate is 10 million tonnes at 62.2% iron, including 8.3 million tonnes in proven and 1.7 million tonnes in probable ore reserves.
Fenix, which has a market capitalisation of $263.95 million, says based on forecast cash operating costs of $77.5 per tonne and an assumed 62% iron index price of $153.85 per tonne, the project will generate an average earnings before interest, taxes, depreciation and amortisation (EBITDA) of $47.9 million.
The estimated initial pre-production capital investment is $22.9 million, with sealing of the road train haul road costs of $3 million being deferred post-starting production, for a total investment of $25.9 million.
Executive Chairman John Welborn says Beebyn-W11 will be the company’s third operational iron ore mine in Western Australia’s Midwest region.
“The Feasibility Study demonstrates that Beebyn-W11 is an outstanding high-grade opportunity, which will generate strong financial returns in the forecast iron ore market,” Welborn says.
“The robust economic outcomes are supported by low initial capital costs and Fenix’s strategic infrastructure advantage.”
Fenix is currently progressing project execution work and approvals. The company expects all regulatory and environmental approvals to be received this year.
Welborn says further opportunities exist to expand the company’s operations and it continues to seek additional mining projects, as well as investigate the potential to provide third-party logistics solutions to future project partners.
“It’s an exciting time for Fenix with Iron Ridge continuing to perform strong, the recommissioning of the Shine Iron Ore Mine underway, and Beebyn-W11 expected to commence production in early 2025.”
Beebyn-W11 lies 508km from the Geraldton Port and 20km from the company’s Iron Ridge Mine.
Write to Aaliyah Rogan at Mining.com.au
Images: Fenix Resources
