13/07/2021 - 15:15

High iron ore prices boost Fenix

13/07/2021 - 15:15

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Shares in Fenix Resources hit an all-time high this week, ahead of today’s quarterly report showing strong growth in the iron ore miner‘s operating cash flow.

Iron Ridge is located 486 kilometres from Geraldton. Photo: Fenix Resources

Shares in Fenix Resources hit an all-time high this week, ahead of today’s quarterly report showing strong growth in the iron ore miner‘s operating cash flow.

ASX-listed Fenix shipped its first iron ore cargo from Geraldton early this year and has continued to benefit from the commodity’s record highs.

The company completed five shipments during the June quarter, for a total volume of 280,000 tones.

While this is very small compared to the industry majors, Fenix is one of just two ASX-listed miners to have commenced production during the current boom.

It also has high-grade ore, meaning it achieved an average selling price of $US185.20 per dry metric tonne FOB, equivalent to $US215.60 per dmt CFR.

With C1 cash costs FOB of $A85.30 for the quarter, the company is enjoying high margins.

As a result, the company generated $A45.1 million of net operating cash flow in the June quarter.

With no debt on its balance sheet, the company’s cash reserves more than doubled during the June quarter to $69 million.

Managing director Rob Brierley said the company would formulate its dividend policy ahead of the release of its annual results.

He noted in a conference call the company had surplus cash and had also used up its prior tax losses, meaning it would start generating imputation credits that could be used by shareholders.

Mr Brierley said the company has refined its mine plan to accelerate production.

Its mining contractor is currently mining and crushing at a rate 10 per cent higher than nameplate capacity of 1.25 million tonnes per annum.

Fenix said road haulage to Geraldton continued to be the critical component to achieve accelerated production.

Its Iron Ridge mine is 486km from Geraldton.

Mr Brierley said Fenix would undertake some exploration activity on Scorpion Minerals’ adjacent tenements and a small drilling program was planned at Iron Ridge looking at incremental extensions.

He emphasised Fenix would continue as a niche producer with high margin operations.

The company’s shares closed lower today at 40.5 cents, down from its all-time high of 42 cents yesterday.

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