Fenix Resources has completed the acquisition of Mid-West iron ore, port and rail assets, from Mount Gibson Iron, an Australian producer of high-quality direct shipping grade iron ore.
The acquired assets include Shine Iron Ore Mine, two on-wharf bulk material storage sheds at Geraldton Port, and two rail sidings at Ruvidini and Perenjori.
In addition, the Australia-based iron ore company acquired mining assets and obligations at the Extension Hill Iron Ore Mine.
Mount Gibson has received transaction consideration comprising A$10m ($6.73m) in cash, 60 million fully paid ordinary shares in Fenix, and 25 million options.
Once the transaction is completed, Mount Gibson holds 8.6% of Fenix’ issued ordinary shares.
Fenix chairman John Welborn said: “We are extremely excited about the start of a new chapter for Fenix. We are delighted to be continuing the successful legacy of Mount Gibson in the Mid-West and to have their support as a large shareholder.
“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.”
Fenix said that its acquisition of Mount Gibson’s Mid-West iron ore and port assets will significantly expand its Mid-West asset base and provides support for its future growth.
The transaction would help expand production and reduce the production cost from the Iron Ridge mine and help re-commission the Shine Iron Ore Mine as a second production asset.
Also, the acquisition would create a new revenue-generating business from the provision of logistics solutions to existing and future Mid-West bulk commodity producers.
Fenix will benefit from the potential growth in bulk commodity production and export in the Mid-West region of Western Australia.
