Fenix Resources bids for CZR to create large-scale iron ore business in WA’s Pilbara

Fenix Resources (ASX: FEX) says partnering with CZR Resources (ASX: CZR) will create a large-scale, diversified mining and logistics business operating in Western Australia’s major iron ore regions.

Fenix will bring its $56.1 million in cash and ongoing cash flow from its Mid-West operations to deploy into the development of CZR’s Robe Mesa iron ore project in the Pilbara region of WA.

The CZR Resources board has recommended its shareholders back the all-scrip offer that values CZR at $71m, with major shareholder Mark Creasy reported to be supportive of the deal.

‘Transformational event’

“The acquisition of CZR is a transformational event for Fenix,” Fenix executive chair John Welborn said.

“CZR’s Robe Mesa iron ore project is one of the last independent large-scale, high-quality iron ore development assets in the Pilbara.”

“Fenix’s market-leading port, logistics and mining capabilities are ideally suited to rapidly and efficiently advance Robe Mesa into production and maximise value creation for our combined shareholder group.

Long-life opportunity

Mr Welborn noted that CZR’s Robe Mesa Iron Ore Project would give his company the opportunity to develop long-life iron ore production.

“Fenix is on track to triple iron ore production during 2025 via the expansion of our Mid-West iron ore mining portfolio and by using our unique integrated mining, logistics and port infrastructure model,” he said.

“The addition of CZR’s assets will expand our portfolio to include interests in projects with mineral resources of approximately 140 million tonnes of iron ore and provide an immediate opportunity to develop large-scale, low-cost iron ore production in Western Australia.”

Robust premium

CZR managing director Stefan Murphy said the offer represented a robust premium to the CZR share price.

“It will also give our shareholders the opportunity to receive shares in Fenix, which has the intent, the capability and the balance sheet to deliver the Robe Mesa iron ore project and Ashburton Link as outlined in our [October 2023] definitive feasibility study.”

“I am confident that under Fenix’s leadership, Robe Mesa will be successfully developed and operated in a highly profitable way for shareholders of Fenix and CZR.”

“Absent a superior proposal, the board unanimously recommends that CZR shareholders accept Fenix’s offer.”