Western Australia (WA)-based iron ore producer Fenix Resources has entered a binding bid implementation agreement to acquire CZR Resources through an off-market takeover bid.
The acquisition will establish a diversified iron ore mining and logistics business for Fenix in WA’s major iron ore regions, Mid-West and the Pilbara.
Under the agreement, CZR shareholders will receive 0.85 Fenix shares for each CZR share they hold, with the potential to increase to 0.98 shares if Fenix secures a 75% interest in CZR by 21 March 2025.
The base offer consideration values CZR at approximately A$61.4m, an “attractive” premium over recent volume-weighted average prices (VWAP) of CZR shares. If the increased offer consideration is met, the value rises to roughly A$70.8m.
Upon completion, CZR shareholders will own around 23.8% of the combined entity.
The combined entity will leverage Fenix’s operational expertise and profitability in mining, logistics and port operations, along with CZR’s 85% stake in the Robe Mesa Iron Ore project in the Pilbara region.
Fenix’s vertically integrated mine-to-port business model is expected to create significant value for CZR shareholders when applied to the Robe Mesa Iron Ore project.
Fenix will contribute more than A$56.1m in cash and ongoing cash flows from its Mid West operations to support the development of the Robe Mesa project.
Fenix executive chairman John Welborn said: “The acquisition of CZR is a transformational event for Fenix. CZR’s Robe Mesa Iron Ore project is one of the last independent large-scale high-quality iron ore development assets in the Pilbara. Fenix’s market-leading port, logistics and mining capabilities are ideally suited to rapidly and efficiently advance the Robe Mesa into production and maximise value creation for our combined shareholder group.”
The agreement includes standard exclusivity arrangements and a break fee of A$650,000 in favour of Fenix, should certain conditions not be met.
The offer is contingent upon a minimum 75% acceptance by CZR shareholders, no material adverse changes and no regulatory actions, among other conditions.
Additionally, Fenix will provide CZR with a A$2.4m standby unsecured loan facility to support working capital needs.
CZR managing director Stefan Murphy said: “The CZR Board is excited to recommend this transaction with Fenix to shareholders in the absence of a superior proposal. The offer represents a robust premium to the CZR share price. It will also give our shareholders the opportunity to receive shares in Fenix, which has the intent, the capability and the balance sheet to deliver the Robe Mesa Iron Ore project and Ashburton Link as outlined in our DFS.”
Previously, CZR entered into a conditional sale agreement with Miracle Iron Resources for the Robe Mesa Iron Ore project, which was terminated by CZR on 24 February 2025.
Poynton Stavrianou and Hamilton Locke are advising Fenix on the acquisition, while Thomson Geer is advising CZR.
