- Fenix Resources (FEX) signs a deal to acquire full ownership of the joint venture haulage business Fenix-Newhaul
- The parties have signed definitive agreements, where Fenix will buy Newhaul’s 50 per cent interest or $16.5 million in cash and equity, as well as contingent milestone payments
- Fenix-Newhaul business was created in 2020 to provide haulage and logistics services to Fenix’s Iron Ridge Project in the Mid-West of Western Australia
- Fenix says with this purchase it will be a fully integrated mining, haulage and logistics company
- Shares in Fenix Resources were up 1.67 per cent to $0.30 as of 10:24 am AEST
Fenix Resources (FEX) has signed a deal to acquire full ownership of the joint venture haulage business Fenix-Newhaul.
The company inked a definitive agreement with its partner Newhaul to purchase its 50 per cent interest for $16.5 million in cash and equity, as well as contingent milestone payments.
Fenix-Newhaul was incorporated in 2020 to provide haulage and logistics services to Fenix’s Iron Ridge project in Western Australia’s mid-west region. The business owns a fleet of 25 quad road trains which provide a haulage capacity to Fenix of up to 4000 tonnes per day.
The purchase will include an upfront payment of $7.5 million and 30 million shares valued at $9 million. Up to 60 million additional shares will be issued upon the satisfaction of certain milestones.
Owning 100 per cent of the haulage business is likely to reduce Fenix’s C1 freight on board (FOB) cash costs by about $10 per tonne, giving Fenix the flexibility to scale haulage operations to match production volumes to market demand and iron ore prices.
Fenix said with this purchase it will be a fully integrated mining, haulage and logistics company.
“Consolidation of Fenix-Newhaul ownership is an important strategic initiative as it immediately reduces our haulage costs. It provides Fenix with a significant advantage over our peers given haulage costs are the largest cost input for Mid-West iron ore miners,” Fenix Managing Director Rob Brierley said.
As part of the deal, founder of Newhaul Craig Mitchell will join the Fenix Board as Non-Executive Director and will become the company’s largest shareholder.
Mr Mitchell said the Fenix-Newhaul team is “excited to join with Fenix and contribute to building an even stronger and more scalable logistics business.”
Shares in Fenix Resources were up 1.67 per cent to $0.30 as of 10:24 am AEST.