Fenix Resources acquires Mount Gibson Iron’s Mid-West assets
Fenix Resources (ASX:FEX) has acquired Mount Gibson Iron’s (ASX:MGX) Mid-West iron ore, port and rail assets.
The 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 purchase consisted of $10m in cash, 60m fully paid ordinary Fenix shares and 25m options.
Following the completion of the transaction, Mount Gibson holds around 8.6% of Fenix’s issued ordinary shares.
The acquisition of Mount Gibson’s assets provides Fenix the opportunity to reduce the cost of its existing Iron Ridge production, expand production from Iron Ridge, re-commission Shine as a second production asset and benefit from the expected growth in bulk commodity production and export in the Mid-West.
Fenix chairman John Welborn said acquiring Mount Gibson’s assets is a game changer for the company.
“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,” he said.
“This transformational event for Fenix will drive material economies of scale, provide flexibility to expand iron ore production and operate new project 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.”
Mount Gibson chief executive Peter Kerr said combining the assets has the potential to unlock and generate substantial value.
“Consolidating our 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,” he said.