Iron-ore junior Fenix Resources is charging toward a transformative year, buoyed by record quarterly shipments and the rapid development of its third mine, Beebyn-W11. 

Executive chairperson John Welborn outlined the company's March quarter performance and growth outlook during a conference call on Tuesday, stating that the miner is on target to achieve its four-million-tonne-a-year run rate by the end of 2025, while navigating a high-stakes takeover bid for CZR Resources.

The Western Australia-based producer shipped 704 000 t during the three months ended March – nearly double its volume a year earlier. Output was evenly split between the Shine mine, which has reached full production, and the existing Iron Ridge mine, which continues to perform steadily.

“Fenix delivered a standout March quarter, marking a major step in our growth trajectory,” Welborn said in an earnings statement. 

He reiterated this optimism on the conference call. "We are basically running at 2.5-million tonnes per annum [rate] and right on our way later this year to achieving our targeted production rate of four-million tonnes per annum."

The Shine mine, now at full production, has exceeded expectations, with lower-than-forecast costs bolstering margins. Welborn highlighted a significant reduction in the mine’s strip ratio. “We’ve seen a good reduction in the C1 cost from the first quarter of production,” he said, attributing savings to both a declining strip ratio and the successful sale of low-grade material not originally in the mine plan. 

The company reported a cash flow margin of $20/t in the March quarter, up from $4/t in the prior period, with potential for further gains if iron-ore prices hold near $100/t.

Iron Ridge, Fenix’s foundational asset, continues to perform reliably, while Beebyn-W11 is poised to catapult output higher.

Site works at Beebyn-W11 are under way, including construction of a 17.6-km private haul road to link the mine to Iron Ridge. With all key approvals secured and a mining contract awarded, first production is targeted for the September 2025 quarter. Welborn described Beebyn-W11 as “a really crucial asset” and a “keyhole” into unlocking the broader Weld Range’s high-quality iron-ore deposits.

The company paid A$5-million to Sinosteel Midwest as part of a right-to-mine agreement, triggered by the receipt of a mining proposal approval for Beebyn-W11. First production is targeted for the September 2025 quarter, underpinning Fenix’s ambition to reach a production run-rate of four-million tonnes a year in 2025.

Welborn emphasised Fenix’s ability to self-fund development, noting, “We last raised capital from the share market in 2020… we have invested more than $200-million in business infrastructure assets that we are now going to use to generate further value for shareholders.”

Addressing analyst questions on funding future capital expenditures, including Beebyn-W11 and the potential acquisition of CZR Resource’s Robe Mesa project, Welborn underscored the company’s cash flow potential. “At four-million tonnes per annum, we will start throwing off a significant amount of cash flow, depending on iron-ore prices,” he said, adding that Fenix could self-fund developments like Robe Mesa without relying on external capital.

TAKEOVER BID INTENSIFIES
Fenix launched a $140-million takeover bid for CZR in late February, aiming to acquire the Robe Mesa iron-ore project in Western Australia. 

The bid aligns with Fenix’s “pit-to-port” model encompassing mining, logistics, and port operations. “The strategic rationale is that [Robe Mesa] is very consistent with our strategy of acquiring, integrating, and developing pit-to-port iron-ore assets,” Welborn said.

However, the deal faces stiff competition. A rival offer from the Robe River Iron Associates joint venture, led by Rio Tinto, was recently deemed “superior” by CZR’s board, triggering Fenix’s right-to-match clause under its bid implementation agreement. 

"We are carefully considering our opportunities to amend our existing offer or propose an alternative offer.” 

Fenix must respond by Thursday, with Welborn affirming a disciplined approach to capital allocation. “It’s pleasing in a way that we have identified an opportunity that two other acquirers, including Rio Tinto, have seen similar value in,” he noted.

Should the takeover succeed, Welborn sees significant synergies with Fenix’s existing operations, particularly in leveraging its haulage and port infrastructure. If unsuccessful, Fenix risks being left with a minority stake in CZR, though Welborn expressed confidence in the company’s broader growth trajectory regardless of the outcome.

As Fenix accelerates toward its four-million-tonne goal, Welborn remains bullish. “In a very uncertain world, we are focused on building a business,” he said, praising the team’s ability to execute greenfield projects on time and budget.