Fenix Resources (ASX:FEX) has achieved a production milestone of 3 million dry tonnes of iron ore at its flagship Iron Ridge Iron Ore Project in the Mid-West region of Western Australia.
The company reports the 3 millionth tonne has been shipped from its facilities at the Geraldton port, with the cumulative milestones of shipped iron ore production and haulage fully verified.
Fenix also reports the shipment has triggered the conversion of 30 million Class D performance shares to ordinary Fenix shares under its acquisition of Iron Ridge in May 2018.
Under the acquisition, Fenix issued 25 million consideration shares and 112.5 million performance shares to the seller, which were vested in 4 stages once specific performance hurdles and profitable production milestones were achieved. Now that the Class D performance shares have been converted, no further performance shares remain outstanding.
Commenting on the shipment, Fenix Resources Chairman John Welborn says: “Fenix’s consistent profitable production from Iron Ridge is the result of excellent work from our hard-working staff and contractors and our capabilities as a fully integrated mining, logistics and haulage business. We have reduced costs to maintain a strong operating margin, which continues to average more than $50 a tonne since first production.
“Strong production and sales performance from Iron Ridge provides the opportunity to advance new growth opportunities that play to our strengths”
Our operations at Iron Ridge are maintaining consistent production at a run rate of approximately 1.3 million tonnes of high-quality iron ore products per annum, and we are working to deliver C1 FOB cash costs below US$60 per tonne. We continue to enjoy strong demand for our products and have a valuable hedge position out to December 2023.
Strong production and sales performance from Iron Ridge provides the opportunity to advance new growth opportunities that play to our strengths. Fenix is a highly profitable Mid-West iron ore producer with fully integrated logistics capabilities and a strong balance sheet. Our aim is to deliver outstanding returns for shareholders.”
Fenix also reports the latest shipment milestone has also triggered the issue of 20 million Fenix shares under its acquisition of haulage company Fenix-Newhaul.
In July 2022, Fenix acquired the remaining 50% interest in the haulage joint venture (JV) company Fenix-Newhaul for 60 million shares contingent on haulage milestones. Along with the 20 million issued after hauling 3 million dmt, the company will issue a further 20 million options once 6 million dmt and 10 million dmt are hauled.
Fenix Resources is an Australian ‘high-grade, high-margin’ iron ore producer operating its flagship Iron Ridge Iron Ore Mine in the Mid-West region of Western Australia.
Production at Iron Ridge began in December 2020, and the company says the project is operating at the planned production rate of 1.3 million tonnes per annum, with the first 3 million dmt sold averaging $52 per dmt shipped, which in turn represents an unaudited gross cashflow operating margin of more than $153 million over 28 months of operation.
The company’s latest quarterly report states it had $68.9 million cash as of 31 March 2023.
Write to Harry Mulholland at Mining.com.au
Images: Fenix Resources Ltd