Fenix finalises Mid West asset acquisition

Iron ore producer Fenix Resources has finalised its acquisition of Mount Gibson Iron’s Mid West iron ore, port and rail assets.

Under the deal, Mount Gibson has become the largest shareholder in Fenix with an 8.6 per cent stake in ordinary shares, receiving $10 million cash, 60 million ordinary shares, and 25 million options.

In return, Fenix has acquired the Shine iron ore mine, which has a mineral resource estimate of 15 million tonnes at 58 per cent iron.

Located 230 kilometres east of Geraldton, Shine has been inactive since 2021 after Mount Gibson suspended its operations due to a decline in iron ore prices and a rise in shipping costs.

Under its ownership, Fenix has planned to recommission the mine.

Fenix has also acquired two rail sidings, at Mullewa and Perenjori, mining assets at the closed Extension Hill iron ore mine, and two on-wharf bulk commodity sheds at Geraldton Port, which has increased its port storage capacity by 400 per cent.

With the new assets, Fenix expects to reduce the cost of iron ore production from its existing operations at its flagship mine site Iron Ridge, and expand logistics opportunities for Mid West bulk commodity producers.

Fenix chairman John Welborn said the company was looking forward to having Mount Gibson’s support as a significant shareholder in the new chapter for the company.

“Acquiring Mount Gibson’s Mid West iron ore and port assets is a game changer,” he said.

“This transformational event for Fenix will drive material economies of scale, provide flexibility to expand iron ore production and operate new projects concurrently.

“In expanding a mine-to-port logistics solution for ourselves and other producers in the Mid West, we also create employment opportunities which will strongly support regional economic growth and create exceptional shareholder value.”

Fenix shares were up 3.2 per cent trading at $0.32 at 11:07am AWST.