Fenix Resources has announced the findings of its feasibility study for the Beebyn-W11 iron project located in the Mid-West region of Western Australia.
Fenix has said that the study reveals a high‐grade, high-quality project that provides strong returns over life of mine with first production expected in early 2025 and an annual production profile of 1.5 million dry metric tonnes per annum.
The maiden ore reserve estimate for Beebyn-W11 is 10Mt at an average grade of 62.2 per cent iron (Fe) and includes 8.3Mt in proven and 1.7Mt in probable ore reserves.
Based on forecasted C1 cash operating costs of $77.5/wmt and an assumed 62 per cent Fe index price of $153.85/t the project will generate forecast annual EBITDA of $47.9 million. Estimated initial pre-production capital investment is $22.9 million, with sealing of the road train haul road cost of approximately $3 million being deferred until post commencement of production, for a total capital investment of $25.9 million inclusive of a contingency of $1.3 million.
Beebyn-W11, which is located 508km from the Geraldton Port and 20km from Fenix’s existing Iron Ridge Mine, is based on a direct shipping ore operation. Ore will be crushed and screened on site and separated into lump and fines product before being trucked to the Geraldton Port.
Fenix’s wholly owned logistics subsidiaries Newhaul Road Logistics and Newhaul Port Logistics will provide haulage logistics and port services, with material to be exported through the company’s existing infrastructure at the Geraldton Port.
Fenix is progressing with project execution work and approvals, anticipating all regulatory and environmental approvals to be received during calendar year 2024, to enable first production at Beebyn-W11 in early 2025.
Right to Mine Agreement
Sinosteel Midwest Corporation (SMC) is the registered holder of the relevant mining lease, 51/869.
In October 2023, Fenix signed a binding agreement with SMC securing the exclusive right to mine and export up to 10 million dMt of iron ore from the Beebyn-W11 iron ore deposit in the Weld Range.
The feasibility study operational and economic outcomes are based on the terms of the Right to Mine Agreement and include the payment to SMC of the base royalty and the profit share royalty payments, as well as the recovery by Fenix of 50 per cent of capital expenditure from SMC capped at $12.5 million plus interest.
The new mine at BeebynW11 will continue the strong partnership between Fenix and SMC and provides scope for the parties to investigate further opportunities to monetise high-value projects within the vast resource rich Mid-West region.
Fenix Executive Chairman, John Welborn, said that Beebyn-W11 will be Fenix’s third operational iron ore mine in Western Australia’s Mid-West.
“The feasibility study demonstrates that Beebyn-W11 is an outstanding high‐grade opportunity, which will generate strong financial returns in the forecast iron ore market,” Mr Welborn said.
“The robust economic outcomes are supported by low initial capital costs and Fenix’s strategic infrastructure advantage.
“We are committed to a growth trajectory and our vision of increasing mine production to deliver exceptional value to our shareholders. It’s an exciting time for Fenix with Iron Ridge continuing to perform strongly, the recommissioning of the Shine Iron Ore Mine underway, and Beebyn-W11 expected to commence production in early 2025.
“Further opportunity exists to expand our operations and we continue to seek additional Fenix mining projects as well as investigate the potential to provide third-party logistics solutions to future project partners.”
Featured image: Aussie Family Living/shutterstock.com.
