Weld Range, which hosts a mineral resource of approximately 290 million tons with a grade of 56.8%, is notable for its high-quality hematite direct shipping ore (DSO) deposits. Located adjacent to Fenix’s existing Iron Ridge Iron Ore Mine, the project is seen as a strategic move to strengthen the company’s production capacity and regional operations.
Under the agreement, Fenix will make cash payments of AUD 60 million (approximately USD 39.2 million) over two years and pay royalties of AUD 4-5 per ton of ore produced. In addition, an additional profit share will be paid at 10% of net profit if iron ore prices are below USD 100 per ton, and 15% if they exceed this level.
The financing is planned to be covered by the company’s existing cash reserves and operational cash flow. This ensures that Fenix will be entitled to 100% of the earnings after all payments.
Fenix Chairman John Welborn emphasized that the agreement aligns with the company’s strategic objectives: “We are successfully implementing our strategy to unlock the value of onshore iron ore deposits in Western Australia’s Mid West region. Gaining control of 290 million tons of high-quality ore around Weld Range is a groundbreaking step for us. This agreement provides the necessary inventory to achieve our goal of becoming a 10 million-ton-per-year producer.”
The Weld Range project will also benefit from Fenix’s existing road transport, rail, and port infrastructure in the region, minimizing logistics costs.
The company continues feasibility studies to expand the Beebyn-W11 deposit and develop other nearby deposits. In addition, SMC reserves the right to match offers in Fenix’s sales agreements with third parties.
In March, Fenix also signed a collaboration agreement with MACA, part of the Thiess Group, for the development of the Beebyn-W11 project. This move is in line with the company’s target to increase annual production capacity to 4 million tons by 2025.
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