Join our daily newsletter At The Bell to receive exclusive market insights
- Fenix Resources (FEX) has officially kicked off production at its Iron Ridge iron ore project in Western Australia
- Lump and fines products are being stockpiled at the Port of Geraldton following Fenix’s export arrangement with the Mid West Ports Authority earlier this month
- With first iron ore shipments scheduled for early 2021, Fenix plans to gradually ramp up production to its target 1.25 million tonnes of iron ore per year
- The company locked in sales and offtake arrangements for 100 per cent of the Iron Ridge iron ore with an offtake deal from early December 2020
- As such, today’s production update is sitting well with investors
- Fenix shares are trading over 6 per cent higher at 24 cents each this morning
Fenix Resources (FEX) has officially kicked off production at its Iron Ridge iron ore project in Western Australia.
The company’s transition from explorer to miner is well underway as lump and fines products are being stockpiled at the Port of Geraldton ahead of Fenix’s first iron ore shipment, slate for some time before the end of February 2021.
The Iron Ridge project has an ore reserve of 7.76 million tonnes grading 63.9 per cent iron with an expected production cost of $76.86 per dry metric tonne over the life of the mine.
While production has just begun, Fenix plans to gradually ramp up its production to a rate of 1.25 million tonnes per year.
Today’s news comes not long after Fenix struck a deal with the WA Mid West Ports Authority (MWPA) to export iron ore from the Port of Geraldton.
The four-year export deal gives Fenix the right to export 1.25 million tonnes of iron ore per year with MWPA’s Berth 5 shiploader.
In October, Fenix struck a binding offtake deal with Hong Kong-based Sinosteel International Holding Company for 50 per cent of the estimated iron ore production and sales from Iron Ridge.
With private company Atlas Iron agreeing to act as the marketing agent for the other half of the total iron ore production in late-August, the Sino deal meant Fenix had locked in sales arrangements for all of the ore from the Iron Ridge mine.
As such, with buyers locked in for the Iron Ridge iron ore, today’s production update is boding well with FEX investors.
Shares in Fenix are up 6.52 per cent at 11:21 am AEDT, trading at 24 cents each. The company has a $99 million market cap.
