SYDNEY, AUSTRALIA: Fenix Resources (ASX: FEX) has signed definitive agreements with Newhaul Pty Ltd to acquire Newhaul’s 50% interest in Fenix-Newhaul, resulting in the consolidation of 100% ownership of the haulage business into Fenix.

Factoring in the cash and equity consideration of the Transaction, the additional cash flows generated from the consolidation of the Company’s haulage operations will result in higher earnings for Fenix and higher dividends available to Fenix shareholders.

The transaction will deliver lower operating costs for Fenix with additional value expected from operational flexibility advantages as well as unlocking new growth opportunities that can now be explored for the benefit of Fenix.

Commenting on the acquisition Mr Rob Brierley, Managing Director of Fenix, said: “Consolidation of Fenix-Newhaul ownership is an important strategic initiative as it immediately reduces our haulage costs. It provides Fenix with a significant advantage over our peers given haulage costs are the largest cost input for Mid-West iron ore miners.”

Mr John Welborn, Chairman of Fenix, said: “Fenix-Newhaul is a highly profitable state-of-the-art logistics business which is an essential component of Fenix’s business success. Consolidating 100% ownership is a smart move which will reduce our costs and provide operational flexibility. These advantages will make our business significantly more resilient and robust to commodity price volatility. The transaction is a key outcome from the Board’s recent strategic review and provides Fenix with a vastly improved platform to evaluate and acquire further growth opportunities.”

“Fenix recognises the outstanding work of Craig Mitchell and his team at Newhaul to establish a best-in-class haulage business to support Fenix. We are excited that Craig and the Fenix-Newhaul team will now be joining Fenix and will continue to manage our haulage operations under terms which will motivate and reward our performance.”

Mr Craig Mitchell, Executive Director and Founder of Newhaul, said: “In collaboration with Fenix, Newhaul has established a highly efficient haulage solution to connect Fenix’s Iron Ridge mine in the Mid-West, to the Company’s port operations in Geraldton. This has been achieved by combining a modern, intelligent haulage fleet with a skilled and dedicated workforce, and strong systems and processes. The entire Fenix-Newhaul team are excited to join with Fenix and contribute to building an even stronger and more scalable logistics business. We remain committed to supporting Fenix’s business and are particularly excited by their expansion plans in the Mid-West region.”

Fenix-Newhaul operates a state-of-the-art fleet of 25 quad road trains which provide a daily haulage capacity to Fenix of up to 4,000 tonnes per day. In the last 18 months, Fenix-Newhaul has hauled over 1.8 million wet metric tonnes (wmt), equivalent to approximately 1.72 million dry metric tonnes (dmt), of high-grade iron ore to Geraldton, completing over 15,000 round trips travelling almost 15,000,000 km.

The Fenix-Newhaul business provides additional logistics support to Fenix’s operating iron ore loading facilities at Iron Ridge. The business includes a driver change-over facility and a driver accommodation base at Cue, as well as a Company owned 110,000 sqm depot in Geraldton with 24-hour workshop and administration support.