Fenix Resources (ASX:FEX) executives highlighted record production, sharply higher earnings and a strengthened balance sheet while outlining plans to scale the business well beyond its historical one-mine footprint during a shareholder webinar following the company’s half-year results release.
Record production and earnings
Executive Chairman John Welborn said the half-year to 31 December 2025 delivered “record production and earnings,” with 2.127 million tonnes produced in the six-month period. Welborn said that output demonstrates the company has achieved its 4 million tonnes per annum run-rate target for the 2025 calendar year, noting that the half-year result annualizes to about 4.25 million tonnes and that production was running higher at the time of the call.
Chief Financial Officer Chris Hunt said operating cash flow increased as well, contributing to a closing cash position of nearly A$80 million. Hunt framed the results as evidence of operating leverage in a bulk commodity model, saying “every additional ton that we ship [is] profitable,” and adding that higher shipment volumes translate into higher earnings and cash flow.
Weld Range right-to-mine described as transformational
Welborn emphasized that during the half-year the company executed what he called a “game-changing, transformational” 30-year right-to-mine agreement at the Weld Range Project. He said the arrangement gives Fenix control of 300 million tonnes of high-grade direct shipping ore and supports the company’s view that its integrated supply chain model is working.
Hunt said capital expenditure for the half was just under A$40 million, with the largest component being the A$20 million payment and about A$2 million in transaction costs tied to the right-to-mine transaction. He said that spending changes the business from a short-term producer into a long-life iron ore producer, with benefits expected over the next 20 to 30 years.
Welborn also referenced a scoping study released at the end of the period, which he said carried a net present value of A$3 billion, and reiterated that the company is reinvesting cash flows into long-life growth while maintaining a dividend policy.
Costs, guidance and integrated supply chain
Hunt said half-year C1 cash costs hit the midpoint of guidance at A$75 per wet metric tonne, representing a 7% decrease compared with the prior comparable period. He attributed lower unit costs to cost discipline and the benefit of spreading fixed costs over higher volumes. Hunt also compared the current A$75 level to A$84 at 31 December 2023, describing it as an 11% reduction over that span.
Welborn and Hunt both reconfirmed full-year guidance, with Welborn stating the company expects production of 4.2 to 4.8 million tonnes for FY26 and C1 cash costs of A$70 to A$80 per tonne (FOB Geraldton). Hunt said the company was not changing its cost guidance, and that higher volumes typically support lower costs, though he said the business would continue targeting discipline and incremental savings.
Executives pointed to the company’s integrated model—mining, wholly owned haulage operations and port services—as central to the financial performance. Welborn said the results validate the strength of the supply chain and the operating discipline across the group.
Working capital, financing approach and hedging
Hunt said working capital needs increased as the business scaled, pointing to trade debtors of just under A$20 million at 31 December (related to shipments received early in January), compared with none outstanding at 30 June. He said the company used “cost-effective, low-interest rate iron ore prepayments” with certain offtakers during the half to help manage working capital and to fund the right-to-mine payment.
Looking ahead, Hunt said Fenix was reducing reliance on prepayments as it progresses “more longer-term finance” with a two-to-three-year tenor, which he said would be more appropriate as the company funds expansion at Weld Range toward 10 million tonnes per annum. He said financing for Weld Range expansion would be progressed later in the year, subject to a board decision and a final investment decision, and tied to completion of a feasibility study.
On hedging, Hunt said the company had built what he described as its longest hedge tenor to date, extending to 30 June 2027. He said Fenix had 1.3 million tonnes hedged from 1 January and cited a hedged price of A$151 at the time of the call. He also said the company purchased just over US$100 million in Australian dollar call options to protect surplus U.S. dollar revenue against a rising Australian dollar, with an effective worst-case rate “just under” A$0.73 per U.S. dollar, extending to June 2027.
Responding to a question about higher interest expense, Hunt said the increase reflected higher logistics fleet capex and non-cash interest associated with accounting treatment for the right-to-mine arrangement, along with some prepayment interest. Welborn added that the company remained conservative on leverage, noting unleveraged port assets and equity built in the haulage fleet.
Market outlook, approvals, and mine life commentary
On iron ore market concerns tied to Simandou, Welborn said the project has been discussed for years and is now “in production,” arguing it has been factored into the market for a long time. He said the ramp-up is expected to be slower and more difficult, and stated his view that iron ore prices have shown “structural” outperformance versus analyst forecasts. Welborn also noted iron ore had risen to $99 on the morning of the call following a post–Lunar New Year resumption in trading, calling the price level attractive for Fenix.
On approvals for Weld Range expansion, Welborn said the company already had approvals in place to meet FY26 targets and described progress on additional approvals—such as a proposed private haul road—as “going really well,” citing established stakeholder relationships and an incremental approvals pathway rather than greenfields development. He also provided a timeline expectation for approvals and mining at Beebyn W10, saying approvals were expected in the second half of calendar 2026, with mining at W10 in the first half of FY27.
Asked about potentially extending Iron Ridge, Welborn said there is geological potential for additional ore, including high grades at depth, but noted higher strip ratios and heritage sensitivity around the site. He said the company’s near-term plan is to complete the agreed mine plan at Iron Ridge and focus on lower-cost opportunities in the Weld Range.
On closure costs, Hunt said the company expected minimal, if any, actual closure costs in the next 12 months for Iron Ridge because existing infrastructure and camp facilities would continue servicing other hubs. He said Shine was expected to wind down and close in the second half of the calendar year, but added there would be no material closure costs and that additional ore at later stages could be revisited in the future depending on circumstances.
About Fenix Resources (ASX:FEX)
Fenix Resources Limited engages in the exploration, development, and mining of mineral tenements in Western Australia. It operates through three segments: Mining, Logistics, and Port Services. The company’s flagship property is the 100% owned Iron Ridge Iron Ore project located in Western Australia. It also provides bulk commodity road and rail haulage logistics solutions to fenix operations and third-party customers; and in-loading access through truck or rail for secure storage on wharf storage facilities; and direct ship loading access and services.
