Fenix Resources to start mining iron ore at Shine, nearly doubling production despite price pressure

Fenix Resources (ASX:FEX) has announced it’s to restart mining at the Shine Iron Ore Mine following a detailed strategic review to de-risk the project.

Shine is wholly owned by Fenix; it will take the company $7.4M in CapEx to get stage 1 at Shine off the ground. Production is expected for the late Q4 CY2024 period.

From late 2024 onwards, Fenix anticipates to see 100Kt of ore shipped out of Shine each month – which is also the assumption, at this stage, through FY2026.

The company said on Thursday it expects the restart at Shine to effectively double yearly production, shrugging off mixed forecasts for iron ore prices in the years ahead. Australia’s Federal Budget assumed a cost of US$60/t in 2025, though, this could be a conservative worst-case bet that allows Canberra to announce surprise upside.

At any rate, iron ore prices have improved over the last week, fetching US$114/t in Singapore on Thursday morning pre-market. Iron ore has been under pressure in recent history due to large question marks hanging over the health of China’s economy and more notably its property sector – where lots of Aussie iron ore rock ends up once it’s turned into steel.

Not that Fenix is too bothered. Earlier this year, the company shipped off first ore from its ‘Twin Peaks’ play.

The Shine mine boasts a resource of 15.1Mt of ore at 58% iron. Stage 1 is expected to produce a grade of 60% Fe at $67.50 in cash per wet metric tonne.

“Fenix will use the Company’s 100% owned Newhaul logistics and port services functions to realise significant cost savings,” the company wrote on Thursday.

“Shine will be our second wholly owned producing asset in the Mid-West and is planned to nearly double our annual production levels in the near-term, which will result in increased revenues, stronger cashflows, and profitability growth,” Fenix chairman John Welborn said.

“Fenix is committed to unlocking value from the abundant valuable resources of the Mid-West and the obvious place to start is with the resources that we own and control.”

FEX last traded at 34cps.