Fenix (ASX:FEX) jumps on low-capex iron-ore restart east of Geraldton

Fenix (ASX:FEX) jumps on low-capex iron-ore restart east of Geraldton

July 4, 2024 Off By Jack Baker

Fenix Resources has made the call to restart mining operations at its fully owned Shine Iron Ore Mine, expecting to begin production before year’s end 295 kilometres east of Geraldton in Western Australia.

The Fenix Board approved the restart to the Mid West mine after improvements, derisking and a detailed review, and the company will now go ahead with its stage 1 mine plan, with an estimated expenditure of $7.4 million.

Haulage of 100,000 tonnes a month is slated to begin during the current financial year and continue producing at a similar rate through the next from Shine’s 15.1 million tonne JORC resource averaging 58 per cent iron.

Fenix is already producing at a steady run rate of 1.3 million tonnes a year from its Iron Ridge flagship using its own logistics operation and infrastructure through the Port of Geraldton.

It became a much easier call with all critical infrastructure and approvals in place, and Fenix will assess second and third-stage plans believing there is a significant opportunity to extend the mine life.

Fenix Resources Executive Chairman John Welborn said the scaling option was an obvious opportunity to expand the mine production and leverage the site’s excellent regional mining and transport capabilities.

“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,” he 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.”

The approved capital will also be used to upgrade the existing infrastructure currently serving Fenix, Twin Peaks, and now Gold Valley after signing in a new $70 million haulage and logistics contract.

Fenix believes it is emerging as a dominant Mid West region iron player east of Geraldton, and also acquired the right to mine and export 10 million tonnes of ore from a regional high-grade deposit late last year.

Iron ore prices have continually defied analyst predictions of a China-induced slump through the past few years and hit a fortnight high earlier this week on the back of better data and stimulus hopes.

Read more on iron ore: Iron ore demand growth looks inevitable

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