Fenix Resources Ltd (ASX:FEX) has enhanced iron ore interests adjacent to its flagship Iron Ridge Project in WA through a new agreement with Scorpion Minerals Ltd giving it 100% of iron ore rights at the Pharos Project.
A Deed of Amendment agreement with Scorpion in relation to tenements E20/953 and E20/948 that are 100%-owned by Scorpion accelerates and expands a previous farm-In agreement for the iron ore rights.
This new agreement secures Fenix’s 100% interest in the rights, free from encumbrances, for the life of the tenements.
Advantages for Fenix
Fenix chairman John Welborn said: “We are delighted to have secured 100% ownership of the iron ore rights over a vast area of highly prospective ground in and around our existing mine.
"The new agreement with Scorpion has several advantages for Fenix. The earn-in structure now has greater clarity for both parties, Fenix has secured the sole and exclusive right to explore for iron ore, and our agreement to collaborate in the future means Fenix will enjoy Scorpion’s support for any mining licences, miscellaneous licences or other licence applications required by Fenix to expand our operations.
"Most importantly, we can now explore with confidence that any commercially viable iron ore deposit we define can be processed and mined for the benefit of Fenix using our existing infrastructure and capabilities.”
Agreement expanded
Fenix executed a farm-in and joint venture agreement with Scorpion in February 2021 which enabled the company to earn a 70% interest in the iron ore rights over the Pharos Project tenements by sole funding exploration and resource definition to identify up to 10 million tonnes of iron ore.
The Pharos Project tenements cover 640 square kilometres in the Murchison region of WA’s Mid-West and are contiguous to the tenements comprising Fenix’s flagship Iron Ridge Project and contain numerous known iron ore targets.
Fenix’s Iron Ridge Project and Scorpion’s Pharos Project.
Consideration
Under the new agreement Fenix is deemed to have earned a 100% interest in the iron ore rights on the Pharos Project tenements in exchange for the issue of 4 million ordinary Fenix shares to Scorpion.
Additionally, Fenix has agreed to issue to Scorpion:
- 5 million Fenix shares upon the delineation and public announcement by Fenix to the ASX of an inferred resource of at least 10 million tonnes of iron ore, or an indicated and/or measured resource of at least 1 million tonnes; and
- 5 million Fenix shares upon the first shipment of iron ore by Fenix from the tenements.
“Obvious value-add”
Welborn added: “Given Fenix’s existing mining operations at Iron Ridge, the Fenix-Newhaul operational transport joint-venture, and our company-owned export facilities at Geraldton Port, the opportunity to expand our regional footprint and seek to add to our existing iron ore resource inventory is an obvious value add for Fenix.
“We welcome Scorpion as a shareholder of Fenix and look forward to future co-operation with them on our mutual exploration and mining activities.”
Prospective areas identified
Historical exploration and recent field work at Pharos has identified areas that are highly prospective for iron ore.
Several target areas in close proximity to the Fenix’s existing Iron Ridge mining operations have been prioritised as having the potential to host high-grade iron mineralisation similar to Iron Ridge.
Having secured all required clearance, the company is reviewing data and conducting ground truthing prior to finalising a potential first-pass drilling program over the high priority target areas.
Fenix-Scorpion tenure and Mid-West regional resource projects.
“A sensible deal”
Scorpion’s chairman Bronwyn Barnes said: “Scorpion is very pleased to have expanded our agreement with Fenix to further unlock the iron ore potential of our Pharos Project.
"Based on Fenix’s successful development of Iron Ridge we can see there is obvious potential to work collaboratively to expand operations.
"This is a sensible deal for Scorpion that provides strategic exposure to any future iron ore exploration and development success on our tenements.
"Importantly, it also allows our team to focus its resources on gold and nickel, copper and PGE exploration across our portfolio.”