Posted on 26 Jul 2023
Australian iron ore producer Fenix Resources has successfully completed the acquisition of miner Mount Gibson Iron’s Mid-West iron ore, port and rail assets, Kallanish notes.
The Mid-West assets Fenix has acquired include the Shine Iron Ore Mine, two on-wharf bulk material storage sheds at Geraldton Port, two rail sidings at Ruvidini and Perenjori, and mining assets and obligations at the Extension Hill Iron Ore Mine.
The transaction consideration has been transferred to Mount Gibson, consisting of AUD 10 million ($6.74m) in cash, 60 million fully paid ordinary shares in Fenix, and 25 million options.
Following completion of the transaction, Mount Gibson holds approximately 8.6% of Fenix’s issued ordinary shares.
The acquisition provides Fenix the opportunity to reduce the cost of the company’s existing Iron Ridge production; expand production from Iron Ridge; and re-commission the Shine Iron Ore Mine as a second production asset.
The acquisition will also create a substantial new revenue generating business for Fenix from the provision of logistics solutions to existing and future Mid-West bulk commodity producers; and allows the firm to benefit from the expected growth in bulk commodity production and export in the Mid-West.
“This transformational event for Fenix will drive material economies of scale, provide flexibility to expand iron ore production and operate new projects concurrently,” Fenix chairman John Welborn says.
Mount Gibson chief executive officer Peter Kerr says that consolidating the firm’s remaining Mid-West iron ore assets with those of Fenix is a sensible and attractive combination with the potential to unlock and generate substantial further value for the shareholders of both companies, as well as to support the ongoing growth of bulk materials exports from Geraldton Port.
“We look forward to a positive long-term relationship with Fenix as one of its major shareholders,” he adds.
Source:Kallanish
