Fenix Resources shipped 974,000 tonnes of iron ore in March quarter at a low A$70/wmt cash cost despite cyclone disruptions and diesel supply constraints, boosting cash to A$86.3 million and advancing key projects.
- 974k wet metric tonnes shipped at A$70/wmt C1 cash cost
- Ten million tonnes hauled milestone reached by Newhaul logistics
- Weld Range Definitive Feasibility Study progressing for 10Mtpa expansion
- Strong hedge book covering iron ore, currency, and diesel fuel
- FY26 guidance maintained at 4.2–4.8Mt sales with A$70–80/wmt cash costs
Operational Resilience Despite Cyclone Narelle
Fenix Resources Ltd (ASX:FEX) navigated a challenging March 2026 quarter with 974,000 wet metric tonnes of iron ore shipped at a C1 cash cost of A$70 per wet metric tonne, hitting the bottom of its guidance range. This came despite the disruption caused by Tropical Cyclone Narelle, which forced the closure of Geraldton Port and delayed two shipments into April. The company’s integrated mine-to-port operation demonstrated resilience amid these external shocks and ongoing diesel fuel supply constraints linked to geopolitical tensions in the Middle East.
Cash at quarter-end rose to A$86.3 million, up from A$78.9 million in December 2025, reflecting strong operational cash flows and prudent cost management. The company’s Executive Chairman John Welborn highlighted the priority placed on employee safety and operational readiness amid the cyclone threat, with Fenix activating comprehensive cyclone response procedures across its sites.
Production and Cost Dynamics
Fenix’s iron ore shipments across sixteen vessels were down from 1.24 million tonnes in the previous quarter, largely due to the cyclone-related port closure. Mining output also dipped to 993,000 wet metric tonnes, with a higher strip ratio reflecting accelerated mining at the Beebyn-Hub deposit. The company’s three-mine footprint remains intact, with Iron Ridge, Shine, and Beebyn-W11 operations contributing to shipments.
Group C1 cash costs fell 7% quarter-on-quarter to A$70/wmt, driven by utilisation of previously stockpiled materials. However, diesel fuel price increases are expected to push costs higher in the June quarter. Fenix is actively managing diesel supply risks, having secured hedges for 18 million litres of diesel at prices between US$0.6874 and US$0.7876 per litre for FY27, covering about 30% of its expected fuel needs.
Logistics Milestone and Leadership Change
Newhaul Pty Ltd, Fenix’s wholly owned logistics business, hit a haulage milestone of ten million dry metric tonnes transported since production began. This achievement triggered the final milestone payment under the Newhaul acquisition deal, resulting in the issue of 20 million fully paid ordinary shares to Craig Mitchell, who subsequently stepped down as a Fenix director but remains an adviser for a transitional period.
The logistics fleet also expanded with the delivery of ten new truck and trailer combinations during the quarter, supporting the company’s growth plans and underpinning its integrated supply chain model.
Project Development and Strategic Partnerships
Fenix is advancing the Weld Range Definitive Feasibility Study (DFS), targeting completion in the second half of 2026. The DFS focuses on optimising mine design, product strategy, and infrastructure including the Beebyn-Hub crushing and screening plant, which is under construction with a 5 million tonnes per annum capacity. The company’s vision remains a pathway to 10Mtpa production, building on the Weld Range Scoping Study that outlined potential cost reductions to around A$55/wmt at scale.
On the strategic front, Fenix holds a 37.21% stake in Athena Resources (ASX:AHN) and recently entered a non-binding joint venture agreement with Athena and Terra Mining to develop the Byro Magnetite Project. The venture contemplates Fenix managing haulage, logistics, port services, and product marketing for the Narryer Prospect, with a 30% profit share before tax. This partnership could further diversify Fenix’s iron ore portfolio and enhance regional development prospects.
Hedging and Financial Management
Fenix maintains a robust hedge book with 1.32 million tonnes of iron ore swaps locked in at an average price of A$150.28 per tonne through to June 2027. Currency exposure is managed via US$128 million in Australian dollar call options extending to June 2028, providing a buffer against a stronger Australian dollar that could reduce US dollar-denominated revenues.
Operational cash flow remained positive at A$17.7 million for the quarter, excluding receipts from two shipments deferred to April. Capital expenditure of A$11.4 million was directed primarily at Weld Range expansion, including the new crushing plant, sustaining logistics infrastructure, and a Geraldton residential development.
This quarter’s results confirm Fenix’s steady march towards its FY26 production guidance of 4.2 to 4.8 million tonnes at a C1 cash cost of A$70 to A$80 per wet metric tonne FOB Geraldton, consistent with prior updates. The company’s integrated approach and strategic investments underpin a resilient platform despite external pressures, building on its recent strong half-year financial performance that saw revenue double and profit quadruple doubles revenue and quadruples profit.
Bottom Line?
Fenix’s disciplined cost control and strategic project development position it well, but diesel supply risks and geopolitical tensions will test its operational continuity in coming quarters.
Questions in the middle?
- How will rising diesel prices impact Fenix’s cost structure beyond FY26?
- What timeline and outcomes can be expected from the Weld Range Definitive Feasibility Study?
- How might the Athena joint venture influence Fenix’s growth and product diversification?