Fenix consolidates haulage business to lower iron ore costs

NICHE high grade iron ore miner Fenix Resources is outlaying $16.5 million in cash and shares to acquire the 50% balance of a haulage venture it has been involved-with so as to reduce cash costs of its production by about A$10 per tonne.
Fenix consolidates haulage business to lower iron ore costs Fenix consolidates haulage business to lower iron ore costs Fenix consolidates haulage business to lower iron ore costs Fenix consolidates haulage business to lower iron ore costs Fenix consolidates haulage business to lower iron ore costs

Iron Ridge, WA

The cash component totals $7.5 million while 30 million shares are to be issued. Another 60 million shares could also be eventually issued depending on milestones.

Fenix currently has 516 million shares on issue.

Newhaul's founder Craig Mitchell is expected to become a non-exec director at Fenix.

The Newhaul part of the Fenix-Newhaul joint venture was established to provide haulage and logistics services to Fenix's Iron Ridge project located in the Mid-West region of Western Australia, 490km from Geraldton Port.

The venture has been operating 25 quad road trains which provide a daily haulage capacity to Fenix of up to 4000t per day.

In the last 18 months, Fenix-Newhaul has trucked over 1.8 million wet metric tonnes, equivalent to approximately 1.72 million dry metric tonnes, of high-grade iron ore to Geraldton.

Iron Ridge is claimed to be among the highest grade direct ship ore operations in the world.

The project has produced about $120 million in net operating cashflow to date.

Shares in Fenix have recently been trading around A30c, capitalising the company at $184 million.