Fenix Resources Ltd (ASX:FEX) has produced and sold three million dry metric tonnes (dmt) of iron ore from its flagship Iron Ridge Iron Ore Project in Western Australia, a significant milestone achieved in slightly more than two years since its first sale in February 2021.
The three-millionth tonne of iron ore has been shipped from the company’s facilities at the Geraldton port, marking a momentous occasion for the company.
Fenix has averaged a net operating margin of about A$52 per tonne of iron ore produced at the project, excluding hedging gains, which is a steady and consistent production rate of 1.3 million tonnes per annum since first production.
Strong demand
“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,” Fenix chairman John Welborn said.
“We have reduced costs to maintain a strong operating margin which continues to average more than $50 a tonne since first production.
“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.”
Share conversions
Achieving the feat has triggered the conversion of shares related to Fenix’s acquisition of 100% interest in Iron Ridge as well as the remaining 50% stake in haulage joint venture company Fenix-Newhaul Pty Ltd.
In May 2018, the company issued 25 million ordinary shares and 112.5 million performance shares to Iron Ridge's vendors, the latter of which comprised 15 million Class A, 30 million Class B, 37.5 million Class C and 30 million Class D performance shares.
The milestone achievement has led to the conversion of the Class D performance shares to ordinary shares.
Additionally, it has triggered the issuance of 20 out of the 60 million ordinary shares issued to Newhaul Pty Ltd in June last year for 100% ownership of the Fenix-Newhaul haulage business.
Fenix-Newhaul was incorporated in October 2020 as a 50:50 joint venture company to provide haulage and logistics services to the Iron Ridge Project, 490 kilometres from Geraldton Port.
A robust company
With a strong balance sheet, stable operations, positive ongoing cashflows and a commitment to deliver value to shareholders, Fenix is well placed to progress new opportunities moving forward
“Strong production and sales performance from Iron Ridge provides the opportunity to advance new growth opportunities that play to our strengths,” Welborn said.
“Fenix is a highly profitable MidWest iron ore producer with fully integrated logistic capabilities and a strong balance sheet.
“Our aim is to deliver outstanding returns for shareholders.”