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- Fenix Resources (FEX) recounts a ‘solid’ September quarter on the back of higher production rates, robust margins and strong free cashflow
- The WA-based iron ore miner sold six shipments of iron ore from the Iron Ridge project at average grades that exceeded those of the June quarter
- The company also declared a fully franked dividend of 5.25 cents per share after announcing a $49 million after-tax profit of $49 million
- Fenix spent around $45.8 million on production and $1.5 million on investing activities, ending the quarter with a strong cash balance of around $93 million
- Company shares are up 8.51 per cent and trading at 25.5 cents at 1:06 pm AEDT
Fenix Resources (FEX) has reported what it described as a ‘solid quarter’ on the back of higher production rates, robust margins and strong free cashflow.
The Western Australia-based iron ore miner sold six shipments of iron ore from its flagship Iron Ridge iron ore project in the September quarter. This consisted of 197,848 wet metric tonnes (wmt) of lump at an average grade of 64.8 per cent iron and 143,422 wmt of fines at an average of 62.2 per cent.
Positively for the company, the average grades exceeded those of the previous quarter and displays the high-grade nature of the project.
C1 free onboard cash costs were $86.77 per wmt shipped which was in line with the forecast. However it slightly higher than the previous quarter due to maintenance and improvement works on the port storage and handling facility and a higher strip ratio at the mine.
Fenix was pleased with this result as shipping in July was adversely impacted by sea surge and swell conditions, which led to multi-day closures of the Geraldton Port.
In total, the company has shipped 841,813 tonnes of product from the Iron Ridge project.
Financials
Fenix Resources announced a dividend policy of distributing between 50 and 80 per cent of after-tax profits as fully franked dividends. The company declared a fully franked dividend of 5.25 cents per share after announcing a $49 million profit after tax for FY21.
The materials stock generated $114.4 million in revenue and net operating cashflow of $25.4 million after spending around $45.8 million on production.
Capital expenditure for the quarter was $1.5 million which took the total project capex to date to $16.7 million. Most of the September quarter’s capex related to scheduled road upgrade works. The company expects capex for the December quarter to be about $2 million as the final infrastructure is completed.
At the end of the period, Fenix had a strong cash balance of $93 million, up from $69 million at the start of the quarter.
Company shares were up 8.51 per cent to trade at 25.5 cents at 1:06 pm AEDT.
