Fenix Resources Ltd’s (ASX:FEX) scheduled maiden iron ore shipment from the Port of Geraldton in Western Australia has been delayed due to mechanical issues with the bulk carrier vessel, Ya Tai 2.
The vessel, Ya Tai 2 chartered by the buyer under a free-on-board sales contract, has experienced mechanical issues resulting in a minor oil spill at Geraldton Port.
Around 5,004 wet metric tonnes (wmt) of lump product, grading in excess of 64% iron, have been loaded on the vessel but loading operations have been suspended by local authorities.
The vessel may require repairs at an international repair facility.
Fenix is pursing all available opportunities to export its iron ore products to cover the likelihood that the Ya Tai 2 will not be able to complete loading as originally scheduled.
Next shipment scheduled
Fenix entered a sales contract with its offtake partner Sinosteel International Holding Company Ltd on a free-on-board (FOB) basis, whereby the buyer has responsibility for chartering the vessel.
Therefore, the issue regarding the Ya Tai 2 vessel is not the responsibility of Fenix.
The company has ample product ready for loading and has a further scheduled shipment due to arrive on February 24 and scheduled for loading on February 27, after completion of a mandatory 14-day COVID restriction.
Iron Ridge Project
Operations at Iron Ridge are progressing well with road transport rates recently exceeding 3,400 wmt a day, around 90% of planned output.
Iron Ridge is a premium direct shipping ore (DSO) deposit which hosts a JORC resource around 490 kilometres by road from Geraldton port in Western Australia.
High-grade iron ore attracts a premium price on the seaborne market as Chinese steel works increasingly demand more pure inputs with lower emissions due to increasingly strict government regulations.
Production started on December 21 and road haulage continues on a routine basis.
Export capacity has been secured through binding agreements with the Mid-West Ports Authority for the use of its Geraldton Port facilities.
Product sales are planned to be conducted 50% through an offtake arrangement with Sinosteel International Holding Company Limited and 50% through a marketing agreement with Atlas Iron Limited.