It is the second successful quarter for Fenix, following its maiden iron ore shipment of 220,000 tonnes in March.
Five iron ore shipments were sold in total, comprising 129,331 wet metric tonnes (wmt) of lump and 151,456 wmt of fines.
Lump is thicker and can be introduced directly into a blast furnace (to produce steel) and thus attracts a premium price, while fines are thinner and must be sintered before being introduced into a blast furnace.
Fenix managing director Rob Brierley said the June quarter showed the company’s bona fides as an iron ore producer.
“It was an outstanding quarter for the company on the back of steady-state production rates and strong iron ore prices,” he said.
“It reflects the quality of our Iron Ridge product, our consistent production performance and the robust margins which stem from strong prices and tight cost control.
“Fenix has now established itself as a successful producer of consistently high-grade iron ore products, with five shipments in the June quarter and ore grades that exceeded forecasts.
“We are ideally placed to generate another strong result in the September quarter and continue to strengthen our financial position.”
The average price received for Fenix’s iron ore was US$185.20 per dry metric tonne (dmt), representing a premium on the IODEX 62% iron price of approximately 8%, equivalent to US$16/dmt.
Fenix recorded $83.6 million in receipts from customers and ended the period with operating cash flow of $45.1 million; it holds $69 million in cash and cash equivalents.
Fenix has now shipped more than half a million tonnes of product from its Iron Ridge project and average grade shipped for the June quarter was 61.5% iron for fines (previous quarter: 61.0%) and 64.3% for lump product (previous quarter: 63.2%), exceeding expectations and the ore reserve model.
The current lump to fines ratio of 52:48 continues to be significantly higher than the life-of-mine assumed average of 25:75; the increased proportion of lump production coincides with a period of record lump premium prices, enhancing financial performance.
Fenix has refined its mine plan to accelerate production with the mining contractor mining and crushing at a rate at least 10% higher than nameplate capacity of 1.25 million tonnes per annum.
Road haulage rates are also on the improve, with recent performance proving positive, having trucked 114,196 tonnes in the month of June.
The company anticipates that it will conduct fieldwork in the current quarter on the Scorpion Minerals Ltd (ASX:SCN) farm-in tenements, which are adjacent to Fenix’s operation.
A small reverse circulation drilling program at Iron Ridge is also planned, looking at incremental extensions along strike from the current mineral resource.
In addition, the company is also looking at progressive financial measures to strengthen its position, including a capital allocation policy and a price protection policy.
Scorpion pays a visit
Scorpion announced to investors this morning that it had completed a detailed technical evaluation of the iron ore JV at its Pharos project that included a site visit to the Iron Ridge mine.
SCN director Bronwyn Barnes said the site visit provided further insight into the mineralisation style, potential structural controls and the regional geological setting of high-grade iron ore.
“We have moved quickly to determine the most efficient way forward for the Pharos Iron Ore JV exploration program with Fenix,” she said.
“Detailed air photography will be completed during July and reprocessing of existing open file/multiclient magnetics has been initiated.
“The current program has been designed to quickly identify RC drill targets for high-grade iron ore occurrences at Pharos, and we and Fenix are keen to advance exploration that can expand the iron ore potential of this exciting region.”
- Daniel Paproth