Fenix Resources has acquired the Mid-West iron-ore mining and infrastructure assets from Mount Gibson Iron.
According to the deal, which was announced earlier this year, Fenix has acquired the Shine iron ore mine located 230km east of Geraldton, Australia.
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The mine has been put on care and maintenance since late 2021 due to weakening market conditions, including increased shipping freight charges.
The transaction also included two on-wharf bulk material storage sheds at Geraldton Port, two rail sidings at Ruvidini and Perenjori, equipment, and Mount Gibson’s iron ore mining rights and other obligations at the Shine mine and the closed hematite iron ore mine at Extension Hill near Perenjori.
In exchange, Fenix has made a A$10m ($6.72m) cash payment and issued 60 million Fenix fully paid ordinary shares. The transaction consideration also includes 25 million Fenix options, exercisable in two tranches.
With the completion of the deal, Mount Gibson owns 8.6% of the issued ordinary shares in Fenix.
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By GlobalDataIn a press statement, Mount Gibson Iron said: “The transaction realises value for assets which were not reflected in Mount Gibson’s share price and enables the company to participate via a direct equity interest in an exciting and expanded high-grade Mid-West iron ore mining and bulk materials logistics business.”
With the acquisition, Fenix expects to reduce its existing Iron Ridge production cost, re-commission the Shine mine as a second production asset, expand production from Iron Ridge, and create a substantial new revenue-generating business.
Fenix chairman John Welborn said: “Acquiring Mount Gibson’s Mid-West iron ore and port assets is a game changer. We are extremely excited about the start of a new chapter for Fenix.
“This transformational event for Fenix will drive material economies of scale, provide flexibility to expand iron ore production and operate new projects concurrently. In expanding a mine-to-port logistics solution for ourselves and other producers in the Mid-West, we also create employment opportunities, which will strongly support regional economic growth and create exceptional shareholder value.”
