In August 2021 the high-grade miner adopted a dividend policy that would return between 50% and 80% of after-tax profits as fully franked dividends.
At the time its focus was on exploiting direct shipping ore from a small, modest mine life and believed it would not have any significant future funding requirements to sustain production or invest in additional projects.
Its recent deal to acquire the suspended Shine mine, port and rail assets from Mount Gibson has changed that equation, expanding its asset base in Western Australia's Mid West, and presenting its best option for expanding production since acquiring Iron Ridge in 2020.
Not only is Shine developed, but the company is in the position of offering third-party logistics solutions of rail access and port storage, in addition to its road haulage assets.
But how to capitalise on that? And how much capital is needed?
The miner has tweaked its dividend policy to consider its funding requirements, which suggests any 2023 dividend may be smaller than the past two years, if one is paid at all.
Its Iron Ridge operation has now delivered more than 3.2Mt over the past 28 months, including 351,828 wet tonnes in the June quarter, allowing the company to end 2022-23 with a cash balance of A$76 million.
C1 cash costs for the quarter were down 5% to $79.63/t, and shipping costs were up slightly at $28/t.
Its average sales price was $174/t, with healthy margins of $71/t.
Fenix executive chairman John Welborn said the company delivered another period of "excellent production performance" and was now able to better capitalise on its advantages as an integrated mining, haulage, rail and logistics company, but it is still to determine how best to achieve that, with options including expanding Iron Ridge and recommissioning Shine.
While the company remains committed to shareholder returns, Welborn said the company needed to consider funding requirements if it wanted to grow towards 10Mtpa.
The company was worth $229 million based on its last traded price of 31c per share.
