Fenix Resources targets incremental growth plans after establishing itself as a new bona fide high-grade iron ore miner
- Fenix Resources makes strong progress on Iron Ridge Project with maiden dividend for FY21
- Fenix Resources boosts iron ore production by 27% in June quarter
- Fenix Resources locks in profitability as it hedges 45% of iron ore production
Quick facts: Fenix Resources Ltd
Price: 0.225 AUD
Market Cap: $106.25 m
About the company
Fenix Resources Ltd (ASX:FEX) is the sole owner of the Iron Ridge Iron Ore Project, a premium direct shipping ore (DSO) deposit around 490 kilometres by road from Geraldton port in Western Australia.
Production at the project started on December 21, 2020, and road haulage continues on a routine basis, with the first shipment dispatched in February 2021.
The company’s high-grade iron ore attracts a premium price on the seaborne market as Chinese steelworks increasingly demand more pure inputs with lower emissions due to strict government regulations.
How it is doing
Fenix Resources has hit several milestones in the financial year 2021, making strong progress on its Iron Ridge Iron Ore Project in Western Australia’s Mid-West, which culminated in production commencing in December 2020 and the first shipment dispatched in February 2021.
And to top off the FY21, the company unveiled its dividend policy and declared a maiden dividend of 5.25 cents per share fully franked.
Following dispatch of the maiden shipment of Iron Ridge product in February 2021, Fenix Resources achieved total iron ore sales of 0.501 million wmt, comprising 0.242 million wmt of lump and 259 million wmt of fines, during the reporting period.
It recorded a net profit after tax of $49 million and cash of $69 million as at June 30, 2021.
In what the company describes as an ‘exceptional’ financial performance for the 2021 financial year, other highlights include unaudited net profit before tax of $62 million and unaudited headline net profit after tax (NPAT) of $49 million.
The hedging is covered under iron ore swap arrangements, which stipulate 50,000 tonnes of resource will be priced against the Monthly Average Platts TSI 62 Index and converted to AUD each month from October 2021 to September 2022.
Insight: Fenix Resources boosts iron ore production by 27% in June quarter
What management says
Fenix Resources Ltd's (ASX:FEX) Rob Brierley speaks to Proactive following the news it's hedged around 45% of its planned iron ore production at $230.30 per dry metric tonne over a 12-month period. The hedging is covered under iron ore swap arrangements, which stipulate 50,000 tonnes of resource will be priced against the Monthly Average Platts TSI 62 Index and converted to AUD each month from October 2021 to September 2022.
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