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Fenix Resources makes strong progress on Iron Ridge Project with maiden dividend for FY21

The company unveiled its dividend policy and declared a maiden dividend of 5.25 cents per share fully franked. 

Fenix Resources Ltd makes significant progress on its Iron Ridge Project with maiden dividend for FY21

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. 

Dividend policy

In August, the company adopted a dividend policy to distribute between 50% and 80% of after-tax earnings to shareholders in the form of dividends, either annually or semi-annually.

Fenix managing director Rob Brierley said: “Our unaudited financial results illustrate the rapid and relatively seamless execution of our project delivery strategy.

“We have hit the ground running and taken advantage of robust iron ore prices. The iron ore swap arrangements we entered into in July are already in-the-money and these arrangements secure Iron Ridge’s future for FY22 and beyond.

Fenix also declared a final fully franked dividend of 5.25 cents ($0.0525) per share, equating to a total dividend payment of around A$24.8 million, based on the 472,213,920 shares currently on issue, representing an NPAT payout ratio of 51%.

The record date is September 21, 2021, with a payment date of October 5, 2021.

Iron Ridge operations

In December 2020, production commenced at the Iron Ridge Project, with lump and fines products stockpiled at the Port of Geraldton in preparation for the first shipment, which subsequently took place in February 2021.

Subsequent to the maiden shipment, eight additional ships were loaded in the reporting period, resulting in more than half a million tonnes of product shipped from the project.

The average grade shipped was 61.2% iron for fines and 63.9% iron for lump product, exceeding expectations and the ore reserve model. Average lump to fines ratio of 52.5%:47.5%, is significantly higher than the life-of-mine assumed average of 25%:75%.

This increased proportion of lump production coincided with a period of record lump premium prices, enhancing financial performance during the period.

Fenix continues to expect a reversion to previously assumed levels as the planned pit deepens.

Mineral resources

Mineral Resources totalled 9.8 million tonnes at 64.4 iron as at June 30, 2021, inclusive of ore reserves.

This reflects the iron ore production, which commenced in December 2020.

Quick facts: Fenix Resources Ltd

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Fenix Resources locks in profitability as it hedges 45% of iron ore production

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...

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