Fenix Resources Ltd (ASX:FEX) is executing its incremental growth plans after establishing itself as the newest bona fide high-grade iron ore miner in Australia.
Its high-grade Iron Ridge Project in Western Australia is performing ahead of expectations and attracting market premiums, with the company now in “cash harvest mode”.
By the end of June, a total of 322,000 wet metric tonnes (wmt) of lump and 291,000 wmt of fines were crushed and screened from Iron Ridge.
Also, 242,000 wmt of lump and 258,600 wmt of fines were shipped by the end of the June quarter.
Lump is thicker and can be introduced directly into a blast furnace to produce steel, and thus attracts a premium price, while fines are thinner and must be sintered before being introduced into a blast furnace.
The mineral resource estimate at Iron Ridge is 10.5 million tonnes at 64.2% iron, which represents some of the highest grade iron ore in WA.
It has maiden ore reserves of 7.8 million tonnes at 63.9% iron
Bona fide iron ore producer
Fenix managing director Rob Brierley said the June quarter showed the company’s bona fides as an iron ore producer.
“It was an outstanding quarter for the company on the back of steady-state production rates and strong iron ore prices,” he said.
“It reflects the quality of our Iron Ridge product, our consistent production performance and the robust margins which stem from strong prices and tight cost control.
“Fenix has now established itself as a successful producer of consistently high-grade iron ore products, with five shipments in the June quarter and ore grades that exceeded forecasts.
“We are ideally placed to generate another strong result in the September quarter and continue to strengthen our financial position.”
More than hitting targets
Fenix Resources has mined a total of 687,400 tonnes of ore by the end of the June quarter, with 500,600 tonnes of premium iron ore sold by the end of the quarter.
The average grade of product sold is 62.5% iron, project to date, which is ahead of expectations.
June quarter another success
The company shiipped just shy of 281,000 tonnes of iron ore from the Iron Ridge Project at an average price of US$185 per tonne during the June quarter.
It is the second successful quarter for Fenix, following its maiden iron ore shipment of 220,000 tonnes in March.
Five iron ore shipments were sold in total, comprising 129,331 wmt of lump and 151,456 wmt of fines.
Moving ahead with Scorpion
Fenix is hoping to grow iron ore resources around its Iron Ridge operations with the appointment of Scorpion Minerals Ltd (ASX:SCN) to conduct exploration at the Pharos JV Project.
The JV area totals around 373 square kilometres and is immediately adjacent and contiguous to the Iron Ridge operation, with iron ore targets totalling 15 strike kilometres already identified.
Fenix has requested that Scorpion manage, plan and execute the early phase of exploration at the JV with the agreed program totalling $350,000 over six months to October 31, 2021.
Scorpion has completed a detailed technical evaluation of the iron ore joint venture at its Pharos project, that included a site visit to the Iron Ridge mine.
SCN director Bronwyn Barnes said the site visit provided further insight into the mineralisation style, potential structural controls and the regional geological setting of high-grade iron ore.
“We have moved quickly to determine the most efficient way forward for the Pharos Iron Ore JV exploration program with Fenix,” she said.
“The current program has been designed to quickly identify RC drill targets for high-grade iron ore occurrences at Pharos, and we and Fenix are keen to advance exploration that can expand the iron ore potential of this exciting region.”
Incremental growth
Exploration targeting incremental growth will kick off in the current September quarter.
They include:
➢ Scorpion JV exploration fieldwork commencing in the September 2021 quarter;
➢ Reverse circulation (RC) drilling is due to start in September/October on geophysical targets identified at Iron Ridge Extended and Ulysses; and
➢ Additional RC drilling program at Iron Ridge targeting small strike length extensions due to commence in the September 2021 quarter.
Future plans
Fenix has refined its mine plan to accelerate production with the mining contractor mining and crushing at a rate at least 10% higher than nameplate capacity of 1.25 million tonnes per annum.
Road haulage rates are also on the improve, with recent performance proving positive, having trucked 114,196 tonnes in the month of June.
The company anticipates that it will conduct fieldwork in the current quarter on the Scorpion farm-in tenements, which are adjacent to Fenix’s operation.
A small reverse circulation drilling program at Iron Ridge is also planned, looking at incremental extensions along strike from the current mineral resource.
In addition, the company is also looking at progressive financial measures to strengthen its position, including a capital allocation policy and a price protection policy.