Fenix Resources Secures 30-Year Mining Rights for Weld Range Iron Ore

Weld Range Iron Ore Project: A Milestone in Western Australia's Mining Landscape

The Weld Range Iron Ore Project represents a significant development in Western Australia's Mid-West region, featuring high-quality hematite resources that position it as a valuable asset in Australia's iron ore sector. With Fenix Resources securing exclusive mining rights, this project marks a strategic expansion that will significantly impact the company's production capabilities and market position.

What is the Weld Range Iron Ore Project?

The Weld Range Iron Ore Project encompasses a substantial iron ore deposit located in Western Australia's mineral-rich Mid-West region. This premium hematite resource contains 290 million tonnes of iron ore with an average grade of 56.8%, making it one of the region's most significant undeveloped iron ore assets.

Stretching across the Weld Range geological formation, the project includes multiple deposits with distinct characteristics and development potential. The Beebyn-W11 deposit has been identified as the initial focus for development due to its favorable ore quality and accessibility.

The project's location in the established mining region of Western Australia provides logistical advantages and access to existing infrastructure networks that will support efficient development and operation.

How Did Fenix Resources Secure the Weld Range Project?

Fenix Resources established a landmark agreement with Sinosteel Midwest Corporation (SMC) that grants the company exclusive mining and export rights for the Weld Range Iron Ore Project over a 30-year period. This strategic acquisition substantially expands Fenix's resource base and operational capabilities in Western Australia's iron ore sector.

Key Agreement Terms

The binding agreement includes several important commercial terms that structure the relationship between Fenix and SMC:

• Acquisition Cost: A$60 million ($39.2 million) cash payment structured over a two-year period
• Production Royalty: A$4-A$5 per dry metric tonne of shipped ore
• Profit-Sharing Mechanism: 10% of net profit after tax when iron ore prices are at or below $100 per tonne, increasing to 15% when prices exceed $100 per tonne
• Offtake Consideration: SMC retains matching rights for any third-party purchase offers for up to 100% of the iron ore

This arrangement allows Fenix to gain full operational control while providing SMC with ongoing financial participation in the project's success through royalties and profit-sharing mechanisms.

What Makes the Weld Range Project Strategically Valuable?

The acquisition aligns perfectly with Fenix's growth strategy, creating multiple operational advantages and expansion opportunities that enhance the company's market position.

Geographic Synergies

The Weld Range Project sits adjacent to Fenix's existing Iron Ridge Iron Ore Mine, creating a consolidated mining footprint in the region. This proximity enables Fenix to leverage existing infrastructure and operational expertise while substantially expanding its resource base.

The consolidated operations allow for coordinated development planning, shared resources, and integrated management approaches that maximize operational efficiency across both assets.

Resource Quality and Characteristics

The Weld Range deposits feature direct shipping ore (DSO) characteristics, meaning the extracted material requires minimal processing before export. This quality profile significantly reduces processing costs and capital requirements compared to lower-grade deposits that require extensive beneficiation.

The relatively high iron content of 56.8% positions the Weld Range ore favorably in the market, particularly as steel producers increasingly value higher-grade inputs to reduce emissions and improve efficiency.

Infrastructure Advantages

Fenix's existing operational assets create immediate value-capture opportunities that reduce the development timeline and capital requirements:

• Transportation Fleet: Established road haulage capabilities that can be expanded to accommodate increased production
• Port Access: Secured export facilities and logistics networks at Geraldton Port
• Regional Integration: Strategic position within Western Australia's Mid-West iron ore development corridor

These infrastructure advantages allow Fenix to pursue an accelerated development timeline compared to greenfield projects that would require new infrastructure development.

What Are Fenix's Development Plans for Weld Range?

Fenix is implementing a phased development approach to maximize the project's value while managing capital requirements effectively and aligning with iron ore price trends.

Immediate Development Focus

The company has prioritized the Beebyn-W11 deposit for initial development, with feasibility studies underway to optimize mining approaches and production schedules. This deposit represents the first stage in a broader regional expansion strategy.

In March 2025, Fenix entered into an agreement with MACA (part of the Thiess Group) for the development of the Beebyn-W11 deposit, demonstrating concrete progress toward production.

Production Expansion Targets

Fenix has articulated ambitious growth objectives for its combined Mid-West operations:

• Near-Term Goal: Achieve 4 million tonnes per annum production rate by 2025
• Long-Term Vision: Progress toward 10 million tonnes per annum production capacity

This production growth trajectory represents a significant expansion from Fenix's current operations and would position the company as a more substantial player in the iron ore market.

Integration with Existing Operations

The development plan emphasizes operational integration between Weld Range and Iron Ridge, including:

• Shared infrastructure utilization to maximize capital efficiency
• Coordinated logistics and transportation to optimize costs
• Potential ore blending opportunities to create optimal product specifications for different market segments
• Integrated workforce planning and management

This integrated approach allows Fenix to capture synergies between its operations that would not be available to standalone projects.

How Will Fenix Finance the Weld Range Development?

Fenix has outlined a robust financial approach to fund both the acquisition costs and development requirements, leveraging its existing financial position and operational cash flows.

Funding Sources

The company's financing strategy includes multiple elements:

• Existing Cash Reserves: Utilizing current balance sheet strength from successful Iron Ridge operations
• Operational Cash Flows: Leveraging revenue from ongoing Iron Ridge operations to fund development
• Structured Payment Schedule: The acquisition payment is structured over two years, aligning with development milestones and cash flow generation

This multi-faceted approach reduces financing risk and allows development to proceed without excessive leverage or shareholder dilution.

Financial Outlook

The company anticipates strong financial returns from the Weld Range project, with 100% of post-payment earnings flowing to Fenix. Several factors enhance the project economics:

• The established infrastructure reduces capital intensity compared to greenfield developments
• The high-quality DSO characteristics minimize processing costs
• The phased development approach aligns capital expenditure with cash flow generation
• Operational synergies with existing operations improve overall cost structure

These financial advantages support strong projected returns on invested capital throughout the project lifecycle.

What Market Conditions Support the Weld Range Development?

The iron ore market presents favorable conditions for well-positioned producers like Fenix, particularly those with high-quality direct shipping ore capabilities and established infrastructure.

Iron Ore Market Dynamics

Several key market factors create an opportune environment for the Weld Range development:

• Asian Steel Demand: Continued industrialization and infrastructure development in Asian economies supports robust iron ore demand insights
• Quality Differentiation: Growing price premiums for higher-grade iron ore as steel producers focus on efficiency and emissions reduction
• Supply Chain Security: Increasing emphasis on reliable supply chains from stable jurisdictions like Australia

These market factors create a positive backdrop for new production from high-quality, well-located projects like Weld Range.

Competitive Positioning

Fenix's expanded operations at Weld Range strengthen its position in the iron ore market through multiple competitive advantages:

• Scale Benefits: Increased production volumes improve unit economics and market relevance
• Cost Efficiencies: Shared infrastructure and operational synergies reduce overall cost structure
• Product Flexibility: Ability to offer various product specifications through selective mining and blending
• Reliable Jurisdiction: Western Australia's reputation as a stable mining jurisdiction enhances attractiveness to customers

These competitive strengths position Fenix to capture value across different market conditions and customer requirements.

What Are the Environmental and Community Considerations?

Responsible development practices are central to Fenix's approach at Weld Range, with comprehensive environmental management and community engagement strategies integrated into project planning and execution.

Environmental Management

The company is implementing leading practices in environmental stewardship:

• Water Management: Efficient water use systems and recycling programs to minimize consumption in the arid region
• Land Rehabilitation: Progressive rehabilitation practices integrated into the mining plan
• Biodiversity Protection: Identification and preservation of sensitive ecological areas within the project footprint
• Emissions Reduction: Focus on energy efficiency and renewable energy integration where feasible

These environmental practices align with evolving stakeholder expectations and regulatory requirements while supporting long-term operational sustainability.

Community Engagement

Fenix recognizes the importance of positive stakeholder relationships for project success:

• Local Employment: Prioritizing regional hiring and skills development
• Indigenous Engagement: Respectful engagement with Traditional Owners and protection of cultural heritage
• Local Procurement: Opportunities for regional businesses to participate in the supply chain
• Community Investment: Strategic community development initiatives that create lasting benefits

This comprehensive approach to community engagement helps secure social license to operate while creating shared value from the project's development.

What Challenges and Risks Does the Project Face?

While the Weld Range project offers significant opportunities, several challenges require careful management to ensure successful development and operation.

Operational Considerations

The project faces several operational challenges common to mining developments in Western Australia:

• Infrastructure Capacity: Ensuring sufficient road, rail, and port capacity to accommodate production growth
• Workforce Availability: Addressing skilled labor shortages in Western Australia's competitive mining sector
• Water Security: Securing sustainable water sources in a region with limited natural supplies
• Weather Impacts: Managing seasonal weather variations that can affect operations and logistics

Proactive planning and investment in these areas will be critical to achieving production targets and cost objectives.

Market Risks

Like all commodity producers, Fenix faces market-related risks that require strategic management:

• Price Volatility: Iron ore prices can fluctuate significantly based on global economic conditions and supply-demand balance
• Customer Concentration: Reliance on a limited number of major steel producers as customers
• Competing Supply: Development of new iron ore forecast insights globally that may impact market balance
• Decarbonization Trends: Evolving steel industry practices that may change raw material requirements

A flexible operational approach and strong customer relationships will help mitigate these market risks.

What is the Long-Term Significance of Weld Range for Fenix?

The Weld Range acquisition represents a transformative step in Fenix's evolution as an iron ore producer, creating a platform for sustainable growth and value creation.

Strategic Positioning

With the Weld Range project, Fenix transitions from a single-mine operator to a multi-asset producer with significant resource inventory and production capacity. This transformation fundamentally changes the company's market position and growth trajectory.

The expanded scale and resource base provide resilience against operational challenges at individual mines while creating opportunities for optimization across the portfolio.

Growth Trajectory

The expanded resource base supports a long-term growth trajectory, with potential for:

• Production expansion beyond current targets as infrastructure constraints are addressed
• Extended mine life across multiple deposits within the Weld Range formation
• Operational optimization and cost reduction initiatives as scale increases
• Potential for further regional consolidation and expansion

This growth path creates a sustainable business model with decades of potential operational life based on current resource estimates.

Value Creation Potential

The integration of Weld Range into Fenix's portfolio creates multiple value drivers:

• Scale Benefits: Improved unit economics and market position through increased production volume
• Market Relevance: Enhanced credibility with customers, investors, and stakeholders
• Optionality: Greater flexibility in responding to changing market conditions and requirements
• Talent Attraction: Improved ability to attract and retain skilled professionals in a competitive labor market

These value drivers support long-term shareholder returns while creating broader economic benefits for the region and stakeholders.

Conclusion: A Strategic Milestone in Western Australia's Iron Ore Landscape

The Fenix Resources Weld Range iron ore project represents a strategic milestone in Fenix's growth journey, significantly expanding its resource base and production potential in Western Australia's Mid-West region. By leveraging existing infrastructure and operational capabilities, Fenix is positioned to efficiently develop this high-quality iron ore asset while creating sustainable value for shareholders and stakeholders.

The 30-year mining rights agreement with Sinosteel Midwest Corporation provides Fenix with long-term access to 290 million tonnes of iron ore, supporting the company's ambition to become a 10 million tonne per annum producer. With development activities already underway at the Beebyn-W11 deposit, Fenix is taking concrete steps to realize the significant potential of the top iron ore mines 2025.

As Western Australia's iron ore sector continues to evolve, the Weld Range development demonstrates how strategic resource consolidation and infrastructure utilization can unlock value from previously stranded assets. For investors, customers, and regional stakeholders, this project represents an important new chapter in the development of Australian iron ore advantages.

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