- Fenix Resources announces an agreement with 10M for rights to purchase and export 500,000 tonnes of Direct Shipping Ore (DSO)
- The Twin Peaks Iron Ore project is situated 200km northeast of Geraldton
- The project includes the Woolbung Peak hematite deposit
- 10M will handle project development and mining, Fenix logistics and marketing
- FEX shares are up six and a half per cent, trading at 25 cents
The company will receive $5 million in cash as part of the deal.
10M is a locally owned iron ore company and holds tenements in the Mid West Murchison area of Western Australia.
“We’re delighted to unlock value from another high-grade iron ore deposit in the MidWest” Fenix Chairman Mr John Welborn said.
“The consolidation of the Fenix Newhaul business, and the acquisition of our expanded MidWest rail and port assets, provides Fenix an exciting platform for growth.
Robust payments to Fenix
The Twin Peaks Direct Shipping Iron Ore Project includes the Woolbung Peak hematite deposit under Exploration Licence 59/2408 and Mining Lease 59/768.
Transaction details involve a $5 million cash pre-payment loan and a $40 per tonne Mine Gate Payment.
A further $60 per tonne haulage payable is included, and 70 per cent of notational profits.
“The 10M ore purchase agreement is an immediate boost to our export tonnages while we work to bring the Shine Iron Ore Mine and the Beebyn-W11 deposit into production alongside our flagship Iron Ridge Iron Ore Mine,” Mr. Welborn added.
Project responsibilities include 10M handling the project development and mining, while Fenix manages transportation to Geraldton Port and marketing.
The Ore Purchase Agreement marks 10M’s transition from an exploration entity to a producer, with the first shipment expected in early 2024.
Fenix one month returns are up 96.5 per cent; the company boasts a market cap of $17.7 million.
FEX shares are up six and a half per cent, trading at 25 cents.