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Fenix Resources Ltd reported its Q2 2025 earnings, highlighting significant operational achievements and strategic expansions despite facing a challenging market environment. With a market capitalization of $1.34 billion, the company’s stock saw a decline of 4.69% to a closing value of $0.32. Key developments include the launch of a new mine and a notable expansion in haulage capacity. According to InvestingPro data, the company has demonstrated strong profitability over the last twelve months, with analysts anticipating continued sales growth this year.
Key Takeaways
- Fenix Resources launched its third operating mine, Biven W11, with the first shipment expected in August 2025.
- The company recorded a shipment of 760,000 wet metric tons, marking a new record.
- Fenix Resources expanded its haulage fleet to 70 super quad road trains.
- The average iron ore price remained around $105, with seasonal improvements observed.
Company Performance
Fenix Resources demonstrated robust operational performance by shipping a record 760,000 wet metric tons and mining over 6 million tons from its Iron Ridge site. The company also expanded its strategic footprint by acquiring a 37% stake in the Athena magnetite project. Despite these achievements, the stock price experienced a decline, reflecting broader market challenges and investor sentiment.
Financial Highlights
- Operating cash flow: $25.5 million
- Annualized cash flow generation rate: $100 million
- Iron Ridge realized price: AUD $165 per dry metric tonne
- Chine realized price: AUD $116.60 per dry metric tonne
Market Reaction
The stock price of Fenix Resources dropped by 4.69% to $0.32, reflecting investor concerns despite positive operational updates. This movement places the stock closer to its 52-week low of $0.24, contrasting with its high of $0.445. InvestingPro analysis indicates the stock is currently in overbought territory based on RSI indicators, though it has delivered a significant 17% return over the past year. The decline underscores the cautious market sentiment amid fluctuating commodity prices and global economic uncertainties. For deeper insights into Fenix’s valuation and 12+ additional ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.
Outlook & Guidance
Fenix Resources is targeting a sustained production rate of 4 million tonnes per annum and is exploring potential expansions in its port business to handle up to 10 million tonnes. The company remains optimistic about future growth opportunities, particularly in the World Range area, and is considering collaborations with Sinosteel Midwest Corporation.
Executive Commentary
John Welborn, Executive Chairman, emphasized the company’s strategic focus: "We are very focused on the commissioning of Biven and achieving plus 4,000,000 tonne per annum run rate." He also highlighted the importance of managing operational costs: "At Fenix, we continue to focus on what we can control. That is managing the costs of our operation."
Risks and Challenges
- Market Volatility: Fluctuating iron ore prices could impact revenue and profitability.
- Economic Relations: Changes in Australia-China relations might affect export dynamics.
- Operational Costs: Managing and reducing C1 cash costs remains a priority to maintain competitive advantage.
- Supply Chain Constraints: Potential disruptions could hinder production and shipment schedules.
- Regulatory Changes: New regulations in mining and export could pose compliance challenges.
Q&A
During the earnings call, analysts inquired about Fenix Resources’ growth strategies and potential collaborations. The company addressed questions regarding its fleet expansion and recruitment efforts, as well as its dividend policy, signaling a commitment to shareholder returns and operational efficiency.
Full transcript - Fenix Resources Ltd (FEX) Q4 2025:
John Welborn, Executive Chairman, Phoenix: Welcome to the Phoenix June twenty twenty five Quarterly Activities Report Webinar. My name is John Welborn. I’m the Executive Chairman of Phoenix and it’s my great pleasure to present on what is another strong quarterly performance from Finix and to answer any questions on the quarterly activities report which we’ve released on the ASX and on our website this morning. Welcome to what is a new format for our Finix quarterly webinar. This quarterly webinar is being held by our Atomic’s online meeting platform.
So that enables shareholders to participate in this live webinar and ask questions. You can submit questions at any time. To ask a question, press on the Q and A icon, which you should be able to see at the bottom of your screen. This will open a new screen and at the bottom of that, there’s a section for you to type in your question. Once you finish typing, press enter to send the question.
You can do this at any time and I will try and answer all the relevant questions within the timeframe we’ve allocated to the webinar at the end of what is a summary of the quarter as usual. And we usually receive multiple topics, questions and so I’ll try and amalgamate those together. And please, if we don’t get to a specific question, please feel free to contact me directly. My contact details are on today’s quarterly announcement or via website and we’re always pleased to respond to shareholder and investor questions. So for those who haven’t seen the quarter, it was headlined with a number of really key achievements from the team.
Most notably, another record tons shipped from Geraldton facilities, mined and hauled by Phoenix and Newell Hall, a highly owned logistics subsidiary. So we sent 13 vessels on their way to our customers and a record 760,000 wet metric tons of iron ore. A great outcome, we reduced our C1 cash costs at Iron Ridge to $71.6 per wet metric ton and a stunning performance at Chine where we reduced the C1 cash cost to $51.8 per wet metric ton. So we did say in the March quarterly that we were expecting to reduce those costs from Chine along the lines of the average that we expected. But Riese Olney and his team there have done a stunning job, 464,000 tonnes in the quarter and a brilliant result on costs, driven by our ability to sell low grade material which was originally in the mine plan as mineralized waste.
So Chime is looking better and better. In June, the last month of the quarter we celebrated a number of really important milestones across our business. Within our Westminer mining business, we’ve now mined more than 6,000,000 tons from Iron Ridge and we sent our one hundredth vessel successfully, great result. From Shine, again following on from those results I’ve mentioned, we’ve now shipped more than a million tons from Shine. So a great restart of that operation.
And importantly in June, we achieved our objective of starting our third operating mine. It’s a Greenfield project. It’s very important to the future of Phoenix. That’s the Biven W11 minutee. It’s a right to mine with Sinosteel Midwest Corporation and since then we’ve announced the completion of the haul road and we expect first shipment from the Biben W11 next month in August 2025.
So that’s fantastic, allows us to start the new financial year with three operating mines and we’ll achieve our outcome of being at a 4,000,000 tonne per annum run rate. And in fact, you think about the quarterly that we’re reporting on in this webinar, 760,000 tonnes equates to a 3,000,000 tonne a year run rate and that’s prior to Biven coming online at its expected 1,500,000 tonnes per annum. So there is still risk considerable upside in Fenics’ growth plans. Iron Bridge, we received an average price of AUD 165 per dry metric tonne. That equates to iron ore prices which averaged just below $100 the quarter around $97 For Schein, we received a lower realized price recognizing that low grade material of AUD116.60 per dry metric ton.
But still when you’re considering that low C1 cash cost, both of those operations are demonstrating strong margins for Phoenix. And that flows through into an operating cash flow number of $25,500,000 which again if you annualize it means that during the June we were running at an annualized cash flow generation rate of 100,000,000 off a $97 U. S. Dollar iron ore price. Sitting here today the iron ore price has bounced up to around $105 and our production is increasing even further.
So very exciting times for Fenics as we look forward to getting some market recognition of those results. We also reported obviously on some corporate outcomes. We closed off on our attempt to acquire CZR and expand into the Southern Pilbara and we’ve successfully banked Break Free and the repayment of our loans and we’re delighted to be focusing on the Midwest and where we’ve got crucial infrastructure and expanding operations. So a useful exercise flexing some M and A skills. We were excited about the opportunity we thought to expand the Fenics model.
But Craig Mitchell, myself and the entire Fenics and Newell teams have rededicated ourselves to focusing on the Midwest where we look forward to further news flow and further growth opportunities. We reported on our acquisition of a 37% stake in Athena and while Fenics is trying to stay true to that focus on mining activities, our hauling activities and our port services activities generating revenues and cash flows and profits for Fenics shareholders. Fenics shareholders would also be aware and anyone interested enough to tune into this webinar of the widespread interest in green steel and green iron dynamics and that is demonstrating the excitement we have in our investment in Athena. It’s a very high quality magnetite project. It has the potential to produce a 70% concentrate.
A very rare example of a magnetite project that can produce the quality of concentrate that is required for a successful green iron project. And so that’s something that we’re very keen to support Peter Jones and his team at Athena as they look to advance the Boro magnetite project. We’ve included a cash flow waterfall in the quarterly activities report. It shows that $25,500,000 of net operating cash flow, but also shows that we’ve invested in growth. Almost $12,000,000 in CapEx largely involved in the Biben W11 minutee commissioning and we’ll see that capital extend into the current quarter as we bring that mine online.
Dollars 9,000,000 almost in debt repayments against our expanding haulage fleet. We’re now soon to be operating 70 of our super quad road trains as part of our three minutee operation and some minor investments as part of our green steel approach as well as corporate expenses rounds out what was a really strong quarter, sort of a marginal increase in our cash balance, but a significant boost to our operating capability. Congratulations to everyone in the team. I’ll now move on to answering some questions, so feel free to continue to pose them. First of all, I’ll focus on some questions from our analysts and there’s actually some congruence between those.
So James Williamson at Bell Potter has asked that we’re on track to reach our 4,000,000 tonne per annum target. What do we see at Fenics as our next growth opportunity? That matches a question from David Brennan at Petro Capital about broader opportunities in the World Range area. And also from Michael Bentley at MST, who has asked if we could give an update on the relationship with Sinosteel and Bausch Steel in relation to the Bieben W11 right to mine agreement. So obviously, we are very focused on the commissioning of Bieben and achieving plus 4,000,000 tonne per annum run rate.
I mentioned earlier the significance of the right to mine agreement with Sino Steel Midwest Corporation. And the first place to respond to those questions about our broader growth plans and our focus in the Midwest is to look at the announcement in relation to the right to mine agreement that we published on the October 3, which details the commercial arrangements with Cyano Steel, But importantly talks about how that agreement to mine 10,000,000 tons at Biven W11 links to the future and the parties agreed to collaborate on the further opportunities in the world range. The market should be aware that Sinosteel completed a feasibility study to mine 15,000,000 tonnes per annum out of the world range project on a resource base of around 300,000,000 tonnes. So the real secret in their Midwest portfolio is in the 11 of W11. There are more than 30 Ws which represent deposits in the world range.
Most of those are controlled by cyno steel and the Fenics we see the keyhole into unlocking the value of those deposits, our relationship with Sino Steel Midwest Corporation. We’re demonstrating with the success of the commissioning in Biven W11 and very soon production, our ability to monetize those deposits and we’re very keen to take advantage of the agreement to collaborate on the broader world range. So the opportunities for us are to continue our port business we think has capacity to do more than 10,000,000 tonnes per annum. We’ve got an amazing haulage and logistics team run by Craig Mitchell and the New Wall team. We’ve already shown the ability to expand from 1,400,000 tons to Iron Ridge to currently doing three to very soon be doing more than four.
There is potential to expand beyond that and the obvious opportunities for us to mine are not so much in exploration to answer some of the other questions we’ve received, but are in collaboration with the owners of the explored tons in and around the Midwest and the obvious relationship is existing one we have with SinoSteel. So stay tuned for further information on the first shipment from Biben and on our ongoing collaborations with SinoSteel in terms of the obvious next steps for future growth. In the immediate future obviously, we’re keen to demonstrate how the cash flow that we’ve generated in the June, 25,000,000 will be expanded by the additional production from W11, our ability to continue to control costs and maintain a plus 4,000,000 tonne per annum run rate for the foreseeable future. Certainly through FY 2026, FY 2027, while we look at further growth opportunities. I’ve obviously spoken on iron ore.
We’ve had some questions from others around our multi commodity focus and our third party focus. The most obvious way for us to make value is mine, haul and ship tons that we own and control and can maximize the margin of controlling mining costs, haulage costs and port operations. But we’ve also demonstrated in the past that we can unlock value for third parties and we continue to look for those opportunities where they arise and we’re focused on maximizing our infrastructure investment. It’s a very simple model at Fenics. We look to make the most money when we possibly can.
Obviously, the June represents the fourth quarter of the financial year ending thirty June twenty twenty five. So unsurprisingly, we’ve had some questions in relation to will we pay a dividend. And so I’ll remind shareholders that we have a very clear dividend policy. It says that Fenics will look to pay a full year dividend based on the availability of franking credits and with regard to the future CapEx requirements of the business. And we’ll do that based on our full year numbers.
And that dividend policy was updated from its previous version, which said that we would look to pay between 5080% of net profit after tax as a fully franked dividend to shareholders. So I mentioned the previous dividend policy because I think what investors who are interested to know what will happen with the dividend should wait as the Board will wait and look at our full year numbers. You can get an idea of what they might be based on the four quarters. But I can say that the Board will look at the full year numbers and we’ll make a decision very consistent with that dividend policy. We’ve got lots of franking credits available.
We are still very focused on growth opportunities and the we remain very committed to our dividend policy and I remind shareholders that all the Board are shareholders in the company and we look to reward shareholders where we can consistent with that dividend policy. And that’s a decision of the Board and it’s one that will be made when we’ve got access to those full year numbers and have a very clear idea on what our profit is and also what the CapEx budget is out into FY 2026, which based on our current production and the success in commissioning Bib and W11 looks to be a very positive year. So looking at some other questions, we’ve had a few questions in relation to the Newhall fleet expansion and how that’s going and the availability of drivers. That’s obviously been a big challenge for us, not so much the expansion of the fleet. Anyone in Geraldton or in the Midwest will see our beautiful bright blue trucks and increasing in number.
We’re on the cusp of commissioning a brand new state of the art depot as Nungaloo facility and we’re recruiting drivers all the time and have an excellent team there with Craig Mitchell and his new oil team and that’s going very well. So there are no issues with bringing Beavan W11 online. We’ve been managing that for twelve to eighteen months and that team continues to be an A chain in haulage and logistics. And you can see that in the tons that we’ve hauled during the June and we’ll certainly see it in our full year numbers in the consolidated picture of Fenics. I’ve also had some questions on the iron ore market in general.
And so it’s nice to see that picking up. There’s a seasonal element to that as well as obviously some very positive signs in relation to the Australia China relationship as evidenced by Prime Minister’s recent visit as well as signs from China around stimulus packages and other things flowing through into some optimism in the iron ore price and we’re seeing that reflected in the share price of all the miners. Great to be increasing Fenics’ production, great to be controlling our costs in that environment where we’re seeing let’s say less bearishness in the iron ore price. At Fenics we continue to focus on what we can control. So we and that is managing the costs of our operation.
That’s the best response we can have to volatile iron ore prices. We’ve also been very successful with our hedging policy. If you’ve read the quarterly, you’ll see that we’ve also expanded the successful swap program to include some foreign exchange management. As at June 30, that combination of our core program on foreign exchange and our swap program was about $9,000,000 in the money. Hopefully with what we’ve seen since then in the iron ore price that in the money position has eroded, which is a good thing for our entire business.
But we continue to look to establish those swaps out above AUD150 as far as we can and that’s a positive protection of our margin. But our business is becoming more and more robust and so my comments on the iron ore market in general is I think that there is a general optimism creeping back into the iron ore market and we are in a very strong position as we continue to control our costs, expand our position and demonstrate that at the prevailing iron ore prices we’ve seen over the last three or four years and anyone’s expectation of the prevailing iron ore prices in the future, we have a solid and sustainable business at Fenics with lots of opportunities to expand. I think I’ve responded to the key questions that have been asked. Again, if there’s anyone who has any questions that they’ve either come to or we haven’t addressed, please send them through and we’ll respond to them directly via email. Congratulations to the Fenics team.
It’s another strong quarter. Expect more growth and more opportunity at Fenics. The Midwest is an amazing place for logistics, port services and mining company like Fenics and I look forward to updating you on the success of Beaven, our ongoing production from Iron Region from Schein and other opportunities we are working on. Thanks very much for participating in today’s webinar.
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