Mark Creasy-backed CZR Resources will soon have a new owner in Fenix Resources, but the Western Australian iron ore explorer’s path to get here has been winding.
Fenix announced today it has entered into a binding deal with CZR for an off-market takeover worth $71 million.
It’s a new development for CZR, which was previously engaged in takeover talks with China-backed Miracle Iron Resources with $102 million on the table.
The deal experienced ongoing delays for approval from the Australian Foreign Investment Review Board (FIRB), which was necessary for the deal to enter its final stages.
On January 24, CZR announced its intention to move the sunset date for the Miracle Iron transaction to February 28 to allow more time for approvals.
Either party was entitled to terminate the transaction in that time, a right that CZR exercised yesterday evening.
CZR is now considering Jon Welborn-led Fenix’s offer, which will see CZR shareholders receive up to 0.98 Fenix shares for each CZR share should Fenix acquire a 75 per cent interest before 7pm on March 21.
Failing this, CZR shareholders can expect 0.85 Fenix shares for every CZR share at an implied value of $0.26 per CZR share. CZR has recommended its shareholders unanimously accept the offer.
Based on Fenix’s closing price on February 24, the offer represents a 27 per cent premium on CZR’s shares.
The object of desire for these bids is CZR’s Robe Mesa iron ore project in WA that Welborn describes as “one of the last independent large-scale high-quality iron ore development assets in the Pilbara”.
A 2023 pre-feasibility study for Robe Mesa demonstrated strong financial returns on its 45.2 million-tonne iron ore resource base.
“The acquisition of CZR is a transformational event for Fenix,” Welborn said.
“The addition of CZR’s assets will expand our portfolio to include interests in projects with Mineral Resources of approximately 140 million tonnes of iron ore and provide an immediate opportunity to develop large-scale low-cost iron ore production in Western Australia.”
If the acquisition proceeds, Mark Creasy, a significant shareholder in CZR, will hold a 12 per cent stake in Fenix.
