Fenix Resources (ASX:FEX) posts sturdy first quarterly report since maiden Iron Ridge shipment

• Fenix Resources (FEX) has opened strong on the ASX today after releasing its first quarterly financial report as a bona fide WA iron ore producer
• The company shipped its first iron ore product from its flagship Iron Ridge Project in February
• Following this, Fenix dispatched three more shipments from the Port of Geraldton to ship a total of 220,000 tonnes of iron ore product over the quarter
• The ore was shipped at an average price of US$156 (around A$202) per tonne with cash costs of around $93.20 per wet metric tonne shipped
• The result was $21.8 million in net positive cashflow for Fenix over the quarter — taking Fenix’s cash position to $26.7 million as of March 31 and no debt
• Shares in Fenix Resources are trading just over 8 per cent higher this morning at 32 cents each

Fenix Resources (FEX) has opened strong on the ASX today after releasing its first quarterly financial report as a bona fide WA iron ore producer.

The company shipped its first iron ore product from its flagship Iron Ridge Project in February 2021. While Fenix faced some delays because of mechanical issues with a bulk carrier vessel, the company was able to resolve the problems and ship 37,157 wet metric tonnes (wmt) of product from the Port of Geraldton.

This first shipment was made up of 11,001 tonnes of lump product and 26,156 tonnes of fines.

Following the initial February shipment, Fenix managed to dispatch three additional shipments from Geraldton before the end of March.

The company said the average grade of the shipped product was 61 per cent iron for fines and 63.2 per cent iron for lump product — much in line with company expectations.

All up, Fenix shipped 220,000 tonnes of iron ore product at an average price of US$156 (around A$202) per tonne over the March quarter. With cash costs of around $93.20 per wmt shipped, the company recorded positive net operating quarterly cashflow of $21.8 million.

Importantly, the company said the current cost-per-tonne of shipping the iron ore product includes some extra spending from the ramp-up period in late 2020 and early 2021, meaning now that steady-state production has been achieved, costs are predicted to decline to between $82 and $88 per wmt.

“Fenix has made a strong start to life as an iron ore producer, with four shipments in the March quarter and ore grades in line with our forecasts,” Managing Director Rob Brierley said.

“With steady-state production achieved, we look forward to a solid production performance and a reduction in costs in the June quarter,” he said.

Thanks to the strong quarterly cashflow on the back of Fenix’s first iron ore shipments, the company ended the March quarter with roughly $26.7 million worth of cash in the bank and no debt.

Shares in Fenix Resources are trading 8.47 per cent higher at 10:32 am AEST at 32 cents each. The company has a $132 million market cap.