Fenix Resources has executed a contract for the road transport component of its Iron Ridge Project with Fenix Newhaul (formerly Premium Minehaul) (Fenix Newhaul). Fenix Newhaul is the incorporated joint venture company established to implement the strategic alliance between the Company and Craig Mitchell, the founder and former owner of Mitchell Corp, a major supplier of transport and logistics services to the Western Australian mining industry, as announced on 7 May 2019. Fenix Newhaul is 50% owned by Fenix and 50% owned by Newhaul Pty Ltd (formerly Minehaul Pty Ltd), an entity controlled by Mr Mitchell.
Fenix Newhaul has already ordered prime movers and trailers for the project and secured funding for this specialist equipment through an equipment manufacturer. Fenix Newhaul also has funding for start-up costs and equipment deposits through shareholder loan facilities totalling up to $3.9 million.
The contract is valued at around $360 million for the estimated 6 year life-of-mine, based on a terminal gate diesel price ex Geraldton of around $1.34 per litre (current diesel price is around $1.05). It is due to commence in December 2020, in line with the current project development timeline.
Fenix Managing Director Rob Brierley said: “Road transport was quickly identified as the largest cost component for the commercialisation of Iron Ridge. We took an innovative approach to optimise this aspect and we strongly believe that the joint venture concept with Craig Mitchell has been the right way to go. Fenix Newhaul plan to commence operations with a mix of sub-contract and owned fleet and they are actively recruiting for personnel, with most of their employees to be Geraldton-based”.
The terms of the contract are in line with the Company’s feasibility study, announced on 4 November 2019, and customary for contracts of this nature.
