Fenix Resources (ASX:FEX) Targets Higher Iron Ore Output in FY25 with Mine Expansion and New Acquisition

Highlights

• Fenix Resources moves forward with a binding agreement to acquire CZR Resources, integrating the Robe Mesa Iron Ore project into its operations.
• Despite a 33.11% YoY increase in ore sales in H1FY25, gross profit declined by 70.21% YoY due to lower iron ore prices.
• FEX plans to triple annual production to 4 Mtpa by 2025 with infrastructure investments and enhanced logistics capabilities.

Fenix Resources Ltd (ASX:FEX) is a fully integrated mining, logistics, and port services company based in Western Australia’s Mid-West region. The company has announced a major acquisition which is expected to boost mining efficiencies, export capabilities and logistics.

Fenix Moves Forward with CZR Acquisition

Fenix Resources intends to expand its asset base by acquiring ASX-listed company CZR Resources Ltd. On 25 February 2025, the company inked a binding agreement for an all-scrip, off-market takeover. Under the offer, CZR shareholders will receive 0.85 FEX shares per CZR share, increasing to 0.98 Fenix shares if Fenix secures a 75% stake by 21 March 2025.

This acquisition will integrate CZR’s Pilbara assets, including the Robe Mesa Iron Ore project, with Fenix’s existing operations. The move is backed by CZR’s board and major shareholder Mark Creasy, who holds a 52.2% stake.

On 17 March 2025, Fenix reached an agreement with CZR’s convertible security holders to cancel CZR’s options and performance rights, replacing them with equivalent Fenix securities. This step aligns with the takeover bid, which remains open until 8 April 2025.

On 19 March 2025, CZR unanimously recommended that its shareholders accept the takeover offer presented by FEX and also cited the benefits of the transaction.

Financial Performance in 1HFY25

In the first half of fiscal year 2025 (H1FY25), the company saw a 33.11% YoY increase in total ore sales, rising to 939.5k wmt. Despite lower iron ore prices, revenue grew by 3.18% YoY, reaching AUD 130.97 million compared to AUD 126.93 million in the previous year. This growth was driven by increased sales volumes, which allowed the company to self-fund its Shine Mine operations without external debt.

However, gross profit declined by 70.21% YoY, falling from AUD 39.19 million to AUD 11.68 million.

Strategic Growth and Future Outlook

As per thecompany, it is on track to triple its annual production from 1.5 million tonnes per annum (Mtpa) to 4 Mtpa by the end of 2025 with the development of Beebyn-W11 and Shine Iron Ore Mine.

Furthermore, if Fenix secures a 75% stake in CZR, it will gain full control over the Robe Mesa Iron Ore Project, enhancing its production capacity and diversifying its asset base.

Fenix is also investing in infrastructure improvements, including the Ruvidini Inland Port Terminal and Newhaul Road & Port Logistics. These enhancements will create opportunities for cost reductions and additional third-party revenue streams.

Share performance of FEX

FEX shares closed 1.82% lower at AUD 0.27 per share on 19 March 2025. Over the past year, FEX has recorded a 12.50% rise in its share price. Meanwhile, over the past month, the share price has dropped by almost 8.47%.

52-week high of FEX is AUD 0.445, recorded on 31 July 2024 and 52-week low is AUD 0.235, recorded on 21 May 2024.

Support and Resistance Summary

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

Note 2: The reference date for all price data, and currency, is 19 March 2025. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Disclaimer

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