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- Fenix Resources (FEX) intends to raise up to $15 million through a two-tranche placement to develop its Iron Ridge iron ore project in WA
- Under the first tranche, which doesn’t require shareholder approval, over 68.9 million shares will be issued at 14.5 cents to raise around $10 million
- If shareholders approve the second tranche, Fenix will raise a further $5 million through the issue over 34.5 million shares, also priced at `14.5 cents
- Fenix will use the money to develop its Iron Ridge project and prepare it for first shipment early next year
- Company shares are down 5.71 per cent and are trading for 16.5 cents
Fenix Resources (FEX) has received firm commitments for a placement to raise up to $15 million to develop its high-grade iron ore project.
Fenix will issue 103.5 million new fully paid ordinary shares at 14.5 cents each.
The placement was heavily oversubscribed and received strong support from existing and new sophisticated and professional investors.
The company will now commence the development of its Iron Ridge iron ore project which is targeting its first shipment of direct shipping ore (DSO) in early 2021.
Specifically, the money will go towards capital expenditure and other necessary items to advance and optimise the project, as well as corporate overheads and working capital.
“We are very pleased with the strong support from a number of high-quality institutional investors as the company raises the capital required to commence development of its Iron Ridge iron ore project in Western Australia,” Managing Director Rob Brierley said.
Fenix is moving quickly with the development of the project as this placement follows approval from the WA Department of Mines, Industry Regulation and Safety on August 13, and a mining cooperating and benefits agreement with the Wajarri Yamatji Native Title Group just yesterday.
The Iron Ridge is located near the town of Cue, which lies roughly 620 kilometres northeast of Perth, Western Australia.
It hosts a JORC-compliant total mineral resource of 10.5 million tonnes at 64.2 per cent iron, 3.26 per cent silicon dioxide, 2.57 per cent aluminium oxide and 0.046 per cent phosphorous. Of this resource, more than 95 per cent is in the indicated category.
“Iron Ridge is a simple DSO project which is set to generate very strong cashflow on the back of its shallow ore, proximity to port, high grades and robust margins based on the strong prevailing iron ore pricing environment,” Rob said.
The placement will be issued in two tranches. All up, 68,941,410 new shares will be issued under the first tranche to raise around $10 million. The first tranche does not require shareholder approval.
The second tranche includes the issue of 34,506,866 shares to raise a further $15 million. However, this tranche is subject to shareholder approval at a general meeting which is scheduled for early October.
Company shares are down 5.71 per cent and are trading for 16.5 cents each at 11:55 am AEST.
