Image source: shutterstock.com

Highlights

  • Fenix is an iron ore producer that manages its 100% owned flagship project Iron Ridge Iron Ore mine
  • In FY23, the company reported a net profit after tax of AUD 29.3 million, which resulted in the distribution of 2 cents per share
  • Mount Gibson Iron Ltd has the highest stake in the firm with the shareholding of approximately 8.64%

Fenix Resources Ltd (ASX: FEX) is a high-grade, high-margin iron ore miner located in the Mid-West mining region of western Australia. Iron Ridge Iron Ore project is the company’s flagship project, located near Cue, Western Australia. The current production run rate of the project is 1.3 million tonnes per annum. In addition to this, the company also operates a fully integrated logistics and mining business.

The ASX-listed iron ore producer registered a revenue of AUD 196.80 million in FY23, 21% lower than the previous year. The operating profit for the year was AUD 38.64 million, 44.3% lower than the previous year.

In FY23, the company recorded a net profit after tax of AUD 29.3 million, which allowed the company to announce a fully franked dividend of 2 cents per share. The dividend ex-date is 1 September 2023, and the pay-date is 15 September 2023.

Top 10 shareholders of FEX

The top 10 shareholders of FEX together have approximately 27.72% shareholding in the firm. Mount Gibson Iron Ltd and Mitchell (Craig Douglas) have the highest stake in the firm, with a shareholding of ~8.64% and ~7.20%, respectively.

Recent business update

Through an ASX update dated 1 September 2023, the company informed that it has secured an iron ore hedging contract for 40,000 tonnes of iron ore. Under the arrangement, 10,000 tonnes will be hedged every month at AUD 170.10 per tonne from September 2023 to December 0223.

With this development, the hedging is now in place for 240,000 tonnes, structured as 60,000 tonnes per month at a fixed price of AUD 170.10 per tonne.

Outlook

Recently, the company has acquired and integrated the Fenix-Newhaul logistics business. In July 2023, it acquired Mount Gibson’s mid-west iron ore, rail and port assets, which is anticipated to expand business and offer a foundation for future growth.

The company intends to become a highly profitable, diversified Mid-West miner and logistics provider. FEX has expanded its asset base and capability to increase its mining production beyond Ridge and generate additional value from logistics services.

Share performance of FEX

FEX shares closed at flat AUD 0.235 apiece on 6 September 2023. In the last 12 months, FEX share price has declined by almost 6% and in the last one month, it has dropped by 21.67%.

The 52-week high of FEX is AUD 0.325 apiece, recorded on 27 July 2023, and the 52-week low is AUD 0.198 apiece, recorded on 3 November 2022. The existing share price is 27.69% lower than its 52-week high and 18.69% higher than its 52-week low.

 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, is 6 September 2023. The reference data in this report has been partly sourced from REFINITIV.