Shares in Fenix Resources rise on deal with China Baowu to mine Weld Range for $60m plus future earnings

Fenix Resources has beefed up its fledgling Mid West iron ore empire after striking a $60 million deal with the world’s largest steelmaker.

The agreement with China Baowu gives Fenix the exclusive right for 30 years to mine Weld Range, which is about 500km inland from Geraldton and spreads across 40km of mining tenements.

The expansive tenure contains 290 million tonnes of ore at a grade of 56.8 per cent iron, with about 99mt at a 60.3 per cent iron grade cut-off.

Fenix will pay China Baowu $60m in equal instalments over two years for the right to mine Weld Range, which envelops Fenix’s Iron Ridge and Beebyn-W11 mines.

Once Weld Range is in production, Baowu is owed a production royalty of between $4 and $5 per dry metric tonne, as well as 10 per cent of net profits from the mine if the iron ore price is below $US100 per tonne and 15 per cent of net profits if it’s above $US100/t.

Shares in Fenix surged on the deal — up 12.5 per cent to 36¢, marking its highest stock price since September last year.

“Securing 290 million tonnes of high-quality hematite direct shipping iron ore immediately surrounding our existing operations in the Weld Range is a game changer for Fenix,” Fenix executive chairman John Welborn said.

“Aligned with our aspiration to become a 10 million tonne per annum iron ore producer, this value accretive right to mine agreement provides the inventory we need to maximise the value of our exceptional transport infrastructure and materially expand our operations and extend our mine life.

“Having recently achieved our goal of successfully commissioning our third iron ore mine and attaining our targeted production run rate of 4 million tonnes per annum during 2025, the Fenix team now have the exciting opportunity to extend our ambitions.”

Fenix shipped first ore from Beebyn-W11 two weeks ago and restarted the Shine mine last year.

It scooped up Shine from Mt Gibson Iron in 2023 as part of a $25m bundle deal along with two rail sidings and two Geraldton Port storage sheds.

Fenix in total has three sheds at Geraldton Port to store the ore payload transported by its fleet of 70 quad road trains.

The company last week unveiled net profit of $5.4m for the 2025 financial year, down from the $33.6m produced in FY2024, which Fenix said reflected lower iron ore prices and higher depreciation from its fleet expansion and mine development expenses.

It had $56.8m of cash by June 30.