Fenix Resources Ltd (ASX:FEX) has achieved unaudited sales revenue of $113 million at its iron ore operations for the period since its first shipment in mid-February to June 30, 2021.
In what the company describes as an ‘exceptional’ financial performance for the 2021 financial year, other highlights include unaudited net profit before tax of $62 million and unaudited headline net profit after tax (NPAT) of $49 million.
Fenix is also adopting a dividend policy, which presents that to the extent that dividends can be fully franked, Fenix will distribute between 50% and 80% of after-tax earnings to shareholders in the form of dividends, either annually or semi-annually.
Seamless execution of project strategy
Speaking to the results, managing director Rob Brierley said: “Our unaudited financial results illustrate the rapid and relatively seamless execution of our project delivery strategy.
“We have hit the ground running and taken advantage of robust iron ore prices.
“The iron ore swap arrangements we entered into in July are already in-the-money and these arrangements secure Iron Ridge’s future for FY22 and beyond.
“We are targeting release of our audited FY21 financial result in mid-September, which will include the declaration of our maiden dividend.”
Pricing for 45% of production locked in
On July 22, the ASX-lister hedged around 45% of its planned iron ore production at $230.30 per dry metric tonne over a 12-month period.
The hedging is covered under iron ore swap arrangements, which stipulate 50,000 tonnes of resource will be priced against the Monthly Average Platts TSI 62 Index and converted to AUD each month from October 2021 to September 2022.
At the time, Brierley said the fixed price was sufficient to cover the majority, if not the entirety, of Fenix’s budgeted cost base.
The swap arrangements were executed after the ASX-lister put a price protection policy in place, designed to secure the medium-term future of its pioneer Iron Ridge Iron Ore Project while maintaining exposure to the iron ore price.