Fenix has formed a strategic alliance with trucking and logistics company, Minehaul Pty Ltd (“Minehaul”), which is considered to be a significant step towards the development of Fenix’s Iron Ridge Project (“Project”) located in the Mid-West region of Western Australia.
Fenix and Minehaul have formed a new joint venture company (“JVC”) which will be known as Premium Minehaul Pty Ltd (“PM”). It is intended that PM will provide all trucking services to the Project.
Pursuant to the JVC agreement, Fenix has provided an undertaking that it will ensure all iron ore transport it is involved with in the Mid-West region of WA (including relating to the Project) will be conducted through the JVC.
The terms relating to the provision of these services are to be agreed in the coming months and pursuant to a separate road haulage contract agreement, however the Company expects the JVC arrangements to provide several key benefits to Fenix, including but not limited to:
- Greater transparency in relation to the likely transport costs associated with the Project;
- Significant experience that Mr Craig Mitchell brings to Fenix’s trucking operations;
- Potential for significant cost savings relating to transport costs; and
- Elimination of management role duplication and the sharing of the benefits of innovation throughout the life of the project.
Anticipated Trucking Costs
The Project is located approximately 490km by road from the Geraldton port and therefore it is expected that a significant proportion of the total operating costs associated with the Project will be related to the cost of road transport and logistics. This proportion will be confirmed through ongoing studies relating to the Project.
Consequently, the JVC represents a significant milestone in the management and reduction of the most significant discrete operating cost at the Project.