Cash register ringing at Fenix

New Mid West iron ore producer Fenix Resources successfully completed four shipments in the first quarter, having dispatched its maiden cargo in mid-February (reports MiningNews).
30th April 2021
Resources Rising Stars

New Mid West iron ore producer Fenix Resources successfully completed four shipments in the first quarter, having dispatched its maiden cargo in mid-February (reports MiningNews).

After a few vessel-related teething issues, and one unfortunately-timed COVID lockdown, Fenix managed to sell 200,000 tonnes of iron ore at an average sales price of US$156/t in the March quarter.

A reduced cargo of 11,001t of lump and 26,156t of fines was shipped on the bulk carrier Ya Tai 2 after mechanical issues were resolved on February 19, and the three subsequent cargoes were dispatched in March from Geraldton, Western Australia.

C1 costs averaged A$93.20/t, and are expected to decline to $82-88/t as the operation hits its stride, with an average two 60,000t cargoes per month planned to Sinosteel and via a 50% marketing agreement with Hancock Prospecting's Atlas Iron.

Grades from the Iron Ridge operation were in line with forecasts at 61% for fines and 63.2% for lump.

While the grades match the reserves modelling, the current lump to fines ratio of 49%:51%, is significantly higher than the life-of-mine assumed average of 25%:75%, and the company said it was encouraging for near-term production, especially given the recent trend of strong demand for lump product among Chinese steel mills with a supporting pricing premium.

Iron ore is now trading around US$186/t.

Operating cashflow for the quarter was A$21.8 million, with Fenix now holding $26.7 million in cash and no debt.

That includes $1.7 million from the exercise of in-the-money options.

The company expects to add to its war chest as it reduces capital spending now the development spending is complete.

Fenix aims to produce around 1.25Mtpa of 64.2% iron over almost seven years for life of mine revenue of A$803 million, based on an iron ore price of US$78/t, with cash costs originally estimated at around A$77.

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