Mining company Fenix has achieved a production milestone, surpassing three million tonnes of high-grade iron ore sales from its Iron Ridge mine in WA.
The company averaged around $52 per tonne for the three million tonnes produced since February 2021.
“Fenix’s consistent profitable production from Iron Ridge is the result of excellent work from our hard-working staff and contractors and our capabilities as a fully integrated mining, logistics and haulage business,” Fenix chairman John Welborn said.
“We have reduced costs to maintain a strong operating margin which continues to average more than $50 a tonne since first production. Our operations at Iron Ridge are maintaining consistent production at a run rate of approximately 1.3 million tonnes of high-quality iron ore products per annum…
“Strong production and sales performance from Iron Ridge provides the opportunity to advance new growth opportunities that play to our strengths.”
Fenix first purchased Iron Ridge in 2018 for 25 million ordinary shares plus 112.5 million performance shares. Performance shares change into ordinary shares after specific performance hurdles.
The latest milestone means that Fenix’s class D performances share will convert to ordinary shares upon verification of the production milestone.
Fenix-Newhaul acquisition
In July last year, Fenix announced the acquisition of the remaining 50 per cent interest in haulage joint venture company Fenix-Newhaul. To consolidate ownership of this company, Fenix agreed to pay Newhaul in a total of 60 million in Fenix shares in milestone payments.
The three million tonne milestone satisfies the first of these milestones, so the company will soon pay the first lot of 20 million in shares to Newhaul.
The remaining milestone payments are 20 million shares at six million tonnes, and 20 million at 10 million tonnes.