This, from 3 days ago.Got missed.

Fenix Resources higher as iron ore production begins at Iron Ridge in WA

The WA-based minerals explorer is transitioning to miner with production underway and the first shipment expected to take place in late January or early February next year.

Fenix Resources Ltd (ASX:FEX) is trading higher after beginning iron ore production at its Iron Ridge Project in Western Australia’s Mid-West.

Lump and Fines products are now being stockpiled at the Port of Geraldton in preparation for the first shipment, which is expected to take place in late January or early February 2021.

The Iron Ridge Iron ore project hosts a JORC 2012-compliant indicated and inferred resource of 10.5 million tonnes at 64.2% iron with low impurities and a 7.76 million tonnes probable ore reserve at 63.9% iron.

Shares today have been as much as 11 per cent higher to 25.5 cents after hitting a new 10-year high of 27 cents earlier this month and the company's market capitalisation sits at approximately $99.1 million.

Iron Ridge production

Fenix aims to gradually ramp-up production to an annual rate of 1.25 million tonnes which is proposed to be trucked to the port by a JV signed off in May 2019, with trucking specialist Newhaul Pty Ltd.

The contract is valued at around $360 million for the estimated six-year life-of-mine, based on a terminal gate diesel price ex-Geraldton of around $1.34 per litre with the current diesel price being around $1.05 and is due to start in December 2020.

Feasibility study financials

The Iron Ridge feasibility study found C1 cash operating costs would be A$76.86 per dry metric tonne (life of mine average).

High grade iron ore attracts a premium price on the seaborne market as Chinese steel works increasingly demand more pure inputs with lower emissions due to increasingly strict government regulations.

Export agreements secured

Export capacity has been secured through binding agreements with the Mid-West Ports Authority for the use of its Geraldton Port facilities, for a port allocation of 1.25 million tonnes per annum of iron ore to be exported utilising the Berth 5 shiploader.

Product sales are planned to be conducted 50% through an offtake arrangement with Sinosteel International Holding Company Limited and 50% through a marketing agreement with Atlas Iron Limited.

The initial term of the agreement is four years, with two additional two-year extensions available.

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