Fenix Resources Limited (FEX) Earnings Call Transcript & Summary

[Audio Gap] Welcome to today's Fenix Investor Webinar. My name is Mick Collis, and it's my pleasure to be your host this morning. Now as you're aware, yesterday, Wednesday, the 25th of February, Fenix published its half year results. And joining me today to discuss the announcement and to answer any questions is Fenix Executive Chairman, Mr. John Welborn; and Chief Financial Officer, Chris Hunt. But just before I do pass over to John for some introductory comments, I'll just quickly run through the way this will work. So this is a live webinar being held via Automics online meeting platform, which lets shareholders and investors not only participate in the webinar, but also ask questions in real time. [Operator Instructions] If we get lots of similar questions on one topic, I won't ask them all because we want to try and cover as many topics as possible. And if we run out of time, John will answer them in due course via e-mail. And you can type your questions at any stage. So if there is something you want to know today is a great chance to find out. But to get us started, I'll now pass over to Fenix's Executive Chairman, Mr. John Welborn, for some introductory comments on the half yearly report. John, over to you.

Thank you, Mick, and congratulations on acting from the new Fenix Media Center. You look very bright and shiny this morning, and welcome to shareholders and great to have Fenix's Chief Financial Officer. Chris Hunt joining me on this webinar to cover what is another impressive period and a great announcement from Fenix, as we headlined it record production and earnings. Shareholders will recall that our main target during 2025, the calendar year was to achieve a run rate of 4 million tonnes per annum. And it's not that long ago that, that was a very ambitious target for Fenix as a one-mine producer, Iron Ridge at 1.3 million tonnes originally and then 1.5 million tonnes per annum. So the headline number of the half year, the 6 months to 30th of December -- 31 December 2025 was that we produced record production of 2.127 million tonnes. And that is a great demonstration that we achieved that target of 4 million tonne run rate. And in fact, if you annualize that, we're obviously at 4.25 million tonnes, and we're running it even more now. Obviously, the half year speaks for itself. Revenue went up by 125% on the back of increased production and strong iron ore prices. EBITDA increased by 137% net profit after tax by 419%. As a result of that, you can see that we've materially strengthened the balance sheet. Most importantly, outside of the finance numbers that Chris will talk to -- it's important to remember that during the 6-month period, we executed a game-changing transformational 30-year right to mine agreement on the Weld Range project. So we now control 300 million tonnes of high-grade direct shipping ore. And that's a very important support for what this half year validates, which is the strength in our integrated supply chain. We have a very well-performing strong team in our mining business. We have a fantastic wholly owned Fenix Logistics business in haulage, and we have amazing port assets and a port services team, and they're operating in a fully integrated model that represents all of the revenue and all of the earnings numbers that Chris is about to go through a response of mining iron ore, hauling it to the port, storing it, loading into boats and sending to our customers and being a very important part of the global steel industry. And we're really excited about the opportunities that the finance numbers demonstrate the platform we have. Our strategy has always been clear, acquire very high-quality, high-grade direct shipping ore assets, integrate our logistics and operate an integrated supply chain. We've been scaling production incrementally, and we plan for that to continue, most obviously, through the incredibly exciting scoping study we published at the end of this 6-month period, reminding the market that this had a net present value of AUD 3 billion -- we're reinvesting the cash flows we're generating into long-life growth. We're committed to rewarding our shareholders with a dividend policy, and we've been able to manage both the reinvestment into building a bigger business and looking to reward our shareholders. And hopefully, if you look at the forward cash flows, there's strong predictions that, that can be quite significant value in the future. The half year numbers prove that our strategy is working. And the Board is particularly encouraged that half year NPAT has already exceeded the full year net profit after tax in the previous financial year, so the 12 months to 30 June 2025. The 6-month period to December '25, we've already exceeded it by more than 80%. And from an earnings before depreciation and tax, the half is almost equivalent to the full year FY '25 numbers. So we're growing the business. Our strategies are working. Although I've mentioned that we are investing and we are focused on incremental growth, this 6-month period is actually all about structural growth, game-changing support. We now have decades of future iron ore under us. We've got a great business. I'll now, with great pleasure, pass across to Fenix's Chief Financial Officer, Chris Hunt, to talk about the financials in a bit more detail.

Thanks, John. Appreciate it. And it's great to be discussing the half year financial results with everyone today, which I think really sets us up for a strong position in the run home to 30 June 2026. In terms of the financial metrics, which John has discussed, just quickly, I won't labor on them too long because I think John's simply summarized them. Revenue is up, EBITDA is up, NPAT is up, operating cash flow is up, which has resulted in an increasing closing cash position of nearly $80 million. I think to me, what this clearly demonstrates for this business is the benefit of increased tonnages in a bulk commodity industry such as Fenix with every additional tonne that we ship being profitable. So it's really simple. Every tonne we do, more tonnes equals increased earnings equals increased cash flow. So we need to continue increasing our volumes, which we aim to do and as John has articulated earlier in terms of our strategy going forward. With 3 mines now operating at steady state, and it's really great that Beebyn's ramped up so quickly and we've got production over 4 million tonnes per annum. Certainly, the working capital requirements for the group have grown, and that's clearly noted by -- at 30 June, we had no outstanding trade debtors. At 31 December, we had just over or just under $20 million worth of trade debtors outstanding for shipments that were received very early in January. But clearly, this shows that the working capital of the group -- requirements of the group is growing. So what we did during the half is that we looked at doing some really cost-effective low interest rate iron ore prepayments with certain offtakers, and that's helped us to manage our working capital requirements. And certainly, as we've grown into our third mine or our third mine started, that ramp-up is -- it does use up a lot of working capital until we're at steady state, which we are now, which is pleasing. But it also helped us -- the iron ore prepayments also helped us fund $20 million, 290 million tonne right to mine payment with Sinosteel, which is clearly a long-term investment for this business for the next 20 or 30 years, but we needed to fund it, so we used iron ore prepayments. So going forward, where iron ore prepayments have decreased for us. We've reduced our reliance on them because we are where I'm looking at, and we're progressing more longer-term finance, 2 years to 3 years. And that is appropriate for this business, sort of longer-term tenor finance is more appropriate as we fund -- as we need to fund our scale up in the Weld Range and our business to 10 million tonnes. or prior to 10 million tonnes. It gives us longer-term finance gives us a lot more flexibility going forward in terms of the amount, timing and the actual use of those funds. So that's progressing. The financing for the Weld Range, which is subject to a Board decision and subject to FID, will be progressed later this year. We've certainly had discussions with financiers, but it will be progressed later this year when we complete a feasibility study. But the financing we're looking at now is more 2 years to 3 years, more short term, but longer term than the iron ore prepayments. In terms of C1 cash costs, really pleasing that we've hit the midpoint of the guidance of $75 per wet metric tonne, which year-on-year or half-on-half is a 7% decrease. And again, it's no surprise that with a commodity -- bulk commodity business, the more tonnes we do, the lower our unit rates go because we spread the fixed costs over a lower base. So we're seeing that benefit. What's interesting when I look back on this business at 31 December 2023, C1 cash costs were $84. So 31 December '23, project to date, $84. Currently, we're at $75. So that's a combination, which is an 11% reduction. That's a combination of good cost discipline, which we've got to be continually vigilant on. And also, again, to reiterate, increased volumes, lower our unit rates. That is why we're scaling up or one of the reasons why we're scaling up one of the benefits. Capital expenditure for the half was $40 million, just under $40 million with the primary payment there being the $20 million plus $2 million in transaction costs for the right to mine transaction. Again, it's a payment that's happened in the half, but this expenditure, as John has mentioned earlier, completely transforms this business from a short-term iron ore producer to a long-life iron ore producer. and really sets us up to further reduce our operating costs. So that expenditure, even though we don't see the benefits of it today, we will be seeing the benefits over the next 20 years to 30 years. We also just had under $10 million in CapEx for Beebyn-W11, which is predominantly the final payments in relation to the 18-kilometer private haul road. And then there was some CapEx for logistics capital as well as we do the ramp-up to 4 million tonnes. So that sort of brings you around to that just under $40 million. In terms of our haulage fleet, as we've ramped up to that 4 million tonnes, we've significantly ramped up our haulage fleet assets. And you'll note that on our balance sheet at cost, we have just over $100 million worth of haulage fleet assets. We have actually been aggressively repaying these since we started purchasing trucks and trailers. Over 4 years, we repay this asset over. Typically, in the industry, you probably see 5 years to 6 years. But given we've got the cash flows available, we've continued to aggressively repay this fleet. And that's actually built up an equity position of just over $35 million in those trucks and trailers, which we're not looking to realize or anything like that. But while we've got the cash, we're building up this really strong balance sheet. So I think that's important to note. In terms of CapEx going forward, we have been and we will always continue to look at CapEx on a very disciplined basis. But we are changing somewhat. So again, Fenix used to be a short-term mine life producer. we're now clearly around for a long, long time. So when we think about capital and making capital decisions, we really look at that long-term nature. And predominantly, if that capital can reduce C1 cash costs or all-in costs, it is something that we're very interested in doing and spending that capital to lower that C1 cash cost. So that's how we think about capital going forward, but it continues to be on a disciplined basis. With respect to hedging, people know that we've certainly taken advantage of the market. And we've actually got a really strong hedge position now, probably the longest, I think this company has ever been out in terms of tenor. We're out to 30 June 2027, and we've got 1.3 million tonnes hedged from 1 January, that's decreased a bit. Now we're sitting here towards the back end of February at $151. So it's a really strong position in terms of our iron ore swaps. We'll continue to take advantage of the market when these opportunities present and continue to hedge in an appropriate way. Certainly note that since Chinese New Year has ended, the iron ore price -- I mean the trading started again and the iron ore price has started to increase, which is fantastic. And we've also in the half, purchased just over USD 100 million in AUD call options. And the reason we're doing that is because we're protecting surplus U.S. dollar revenue from a rising Australian dollar price. And we're purchasing call options, which are low cost, and we've got an effective rate of just under $0.73 Australian dollar for every U.S. dollar. We're doing that because it's purchasing the call options is like insurance. If the exchange rate decides to decrease or goes down to under $0.72, it goes down to $0.65, $0.64, and we still benefit from that. We get that full benefit of that rate. But the worst rate or the highest rate that we can pay on these AUD call options is just under $0.73. Now -- and that's a really good rate for us. We're very profitable at that level. So we're very comfortable to be purchasing AUD call options at this rate, and we've extended it out to June '27. So what you can see is that we're really locking in, we've still got some upside. We've certainly still got some upside. But we're really starting to lock away FY '27 in terms of our profitability with our hedging, and they're very, very good rates, and we're very profitable at those levels. So I think in summary, clearly, a very, very strong half, really pleasing to see the supply chain and the ramp-up of our production to over that 4 million tonne rate -- 4 million tonne run rate, sorry. And again, as I said in my opening remarks, it sets us up really well for this half and the run home to 30 June 2026. Thank you. Over to you, John.

Thanks very much, Chris. And another key aspect, as you say, is we're really looking forward to completing FY '26 and firing into FY '27. And obviously, the half year was another opportunity to confirm our guidance for the full year, which is to produce between 4.2 million and 4.8 million tonnes per annum. So the midpoint is 4.5 million. And we've again maintained our cost guidance between AUD 70 and AUD 80 a tonne, C1 cash costs FOB Geraldton. I think Chris' description of the half year demonstrates that the numbers are being generated from strong alignment with the Fenix Board-approved strategy. There's fantastic operational discipline across our integrated supply chain. We're getting leverage on our earnings. We're seeing the balance sheet strengthen, and we're using cash flows to invest in strong future cash flow generating asset base. And they're a very transparent set of accounts. There's a lot of visibility there for people who are interested in understanding how our revenues flow into our cash flows, flow into our earnings before interest, tax, depreciation and then net profit after tax. And so looking forward to questions from the keen chartered accountants out there. As I said earlier, this is a period that demonstrates we're no longer a short-term single asset producer. We are a multi-mine integrated iron ore company. And we are on a pathway of execution based on successful delivery to a 10 million tonne a-year-miner, and that's going to be a significantly scaled business with significant earnings, and we're looking forward to rewarding our shareholders for it. Before the Q&A, I'd also just like to obviously congratulate Chris and his finance team on putting out such a strong set of accounts and the transparency within them. And obviously, that's only possible because of the incredibly hard work of the very small and focused teams we have in our mining business, in our haulage business and in Fenix's port business. So congratulations. It's a really exciting place to work at the moment in Fenix. The Board are aligned behind our strategy. We really appreciate and thank the teams, our contractors, our stakeholders, an increasing group of stakeholders. great to be in Geraldton recently talking to people about our plans and engaging with the local communities. We thank everyone who's involved. And if you're a shareholder out there, look forward to your questions. But my main message to you would be you don't own enough Fenix shares. Over to you, Mick.

Well, as usual, and thanks to Chris as well. As usual, we'll start with some questions from the broker research analysts who do cover Fenix. But if they don't cover something that you would like to know the Q&A button at the bottom of your screen. But we'll start with Michael at MST, who asks, iron ore price, there is much discussion in the market regarding Simandou. Do you have any thoughts or comments on the Simandou effect and your general feeling on the market?

And look, this is a comment that comes up a lot. I think for almost 10 years, Simandou has been known as the Pilbara killer. And there's been a lot of concern in the market about the ability of this mammoth Guinea-based African iron ore project of huge grades to depress the market price of iron ore. My comment would be that, that story is now well known. This is no longer conjecture. Simandou is in production. It's been factored in for a very, very long time. And I am entirely confident that the market has absorbed the reality of Simandou in production. 20% of that material roughly is held on account of Rio, who use it to blend some of their lower-grade ores. Those products are on the seaborne market. Their volumes are well known by analysts, and it's a part of the current balance in the iron ore market. The other production is China-controlled production and it's in the market. So my comments in Simandou would be that analysts have absorbed that and the market has absorbed the reality of that project for some time. Also, the reality is now understood that the ramp-up of that project is going to be slower and more difficult and take longer. And so the other point I would make, and it's almost a general comment on iron ore. MinRes put out recently a very interesting slide that they look backwards year-on-year and published the consensus analyst forecast on iron ore and then the average achieved iron ore price. And it demonstrates there is a structural bearishness in iron ore forecast. We continue to outperform. I am entirely confident that the iron ore price will continue to outperform analyst projections. And that means that Fenix will continue to enjoy high iron ore prices. Chris mentioned that we've just come out of a trading pause for the Chinese Lunar New Year. This morning, iron ore has risen to USD 99. The other point I'd make is that when we talk about the index iron ore price this morning, USD 99, that's now a 61% index. So really, it probably equates to a 62%, the previous historical index price of about USD 102. That's one, a fantastic price for Fenix. Two, it's demonstrating it's trading in a band on around USD 100, and that's a great price for Fenix. We would expect that to continue, and we're looking forward to -- obviously, we've built, as Chris described, resilience. We're demonstrating we've got strong ability to absorb variations in the iron ore price -- the short-term answer is Simandou is already in the market. And increasingly, the market is recognizing that there is significant stability and strength in the iron ore prices around the levels we're seeing at the moment.

Some of these questions might come through to Chris, I know, John, you would -- if you want to jump in and have you say, you're more than welcome. So this one, can you discuss the interest expense increase from prior period and the debt profile going forward?

I think I'll take that one, John, if that's okay. In terms of the interest expense, it's certainly gone up half-on-half. That's a function of increased CapEx, as I mentioned earlier, in terms of logistics fleet. But also, there's quite a bit of noncash interest going through there. When we -- accounting-wise, when we have to value the right to mine or when we valued the right to mine with Baowu that we did in September, that $60 million valuation or payment that we need to make over 3 years, a portion of that is bought back on an amortized cost basis. So we have to have sort of noncash interest going through the P&L. So that will continue. The other point I would make is that we do have some iron ore prepayment interest in there, but that cost is mid- to high sort of mid-single-digit interest expense. So the interest expense is very cost effective for us, but there is quite a bit of noncash interest going through there. And in terms of the debt profile, I think touch on or reiterate what I mentioned earlier. We continually to aggressively amortize our debt. So that will lower our debt profile in terms of going forward for our logistics fleet. But we still need to ensure we have the appropriate liquidity in this business to fund our growth. As mentioned, or as outlined to the market in early December, a 3-year look forward. We have a sustaining capital number in there. So we need to ensure we have sufficient liquidity. And as I mentioned earlier, we're looking at medium- to long-term debt to fund that.

Look, the #1 job of the Chief Financial Officer is to make sure we've always got liquidity, and Chris is doing a good job. I'd just add for interested -- people interested in our debt profile. We're a very conservative company. We really don't have a lot of leverage. If you look when there was a peer group of emerging small-scale iron ore miners or even the large-scale iron ore miners, growth was funded by debt, and there was a great deal more risk to volatility in iron ore prices. Chris has mentioned earlier, the equity we have in our fleet, the assets that we own and control at the port that are unleveraged. And the -- if you look at the underlying transaction to gain control of the Weld Range project, it's predominantly a royalty-based and a very manageable non-index royalty-based payment to Sinosteel, all of which mean that we are not significantly exposed to interest costs on a debt profile currently. And on a very exciting basis, as we've identified, we've obviously got a significant capital requirement for the expansion to 10 million tonnes. But a significant amount of that will be funded by -- as we have done the growth of the company to date by operational cash flow. And we will continue to look at conservative use of debt to fund the exciting and hugely value-creative growth opportunities that we see in front of the company.

This one is on approvals. Can you please give us an update on how you are progressing with the approvals process for the production expansion at Weld Range?

I can. We're going really well. So the first thing to point out is we currently have all the approvals in place to complete our FY '26 mining target of between 4.2 million and 4.8 million. I mentioned that we've had an initial stakeholder meeting around our plans to build a private haul road down the Oakajee rail corridor. And Goran Sat and his project team is rapidly expanding Fenix project team. are well advanced on the pathway for approvals for mining for the private haul road. There's a lot of work to be done there. So approvals are always an incremental process. We now have the advantage of our established base in the Weld Range. We are not progressing any mining greenfield projects. This is incremental approval based on very responsible, compliant mining activity. And we have very, very strong relationships with the key stakeholders, the Wajarri Yamaji people of the Mid-West, the local pastoralists, and shires. And it's a very important plan, and we remain very confident that we will secure the approvals we need to progress through the 3-year production guidance we've provided, where the midpoint is 4.5 million this financial year, 5 million tonnes per annum in FY '27 and 5.5 million heading towards 6 million in FY '28. And then after that, the feasibility study will contain a lot more specific detail on the immediate pathway following that to 10 million tonnes per annum. And also, that will be the moment where we put the time line in place, which will respond to the approvals. But generally, we're very confident. We've demonstrated we can get strong approvals. And the last thing I'd point out is that there isn't anything magical about the 10 million tonne. We will continue to look to expand beyond that. There is no part of that 10 million tonne per annum project that limits us to only 10 million tonnes per annum. So approvals are important. We've got a great track record. We're continuing to work for all the stakeholders. There's strong confidence that we will secure the approvals we need along that 3- to 5-year journey to 10 million tonnes a year and beyond.

This next question might generate a very short answer from you, but you've touched on it a bit, but it says, do you have any further comments on the progress of the Weld Range towards 10 million tonnes per annum?

Well, yes, it's going well. I think there's been an underwhelming response from the market from that feasibility study. This is not a company who is throwing out a scoping study and then talking about their cash burn or having some element of uncertainty about when and how they're going to deliver it. As you've heard, as you can see in the half year, we have a fantastic business. It's got a strong asset base. It's demonstrating it can produce increasing quantities of high-grade products that are well accepted by the market. So my additional comments on the pathway to 10 million tonnes is it is immediate. It is available. We're going to do it and get on board.

Last question from Michael from MST, on Iron Ridge, as you progress towards its completion, are you seeing any potential to extend the life or extract some more ore?

And the answer is yes. We do see that geologically, there is significant potential to extract more iron ore. And when we had a very limited resource base, we were -- and we've been publicly progressing the potential for us to extract further tonnes from the bottom, deeper areas of the pit, and there are some really exceptional grades deep in the Iron Ridge pit. There are 2 challenges with those tonnes. It's deeper, the strip ratio goes up, so they're more expensive tonnes. And significantly, the Iron Ridge mine is in a very sensitive area of the world with significant important heritage sites at both end of the pit behind me. And for those reasons, having secured the Weld Range project is immediately obvious that we have better economic reward by mining more tonnes at W11 and more tonnes at W-10 than extending the Iron Ridge mine. And also, it's important that we respect heritage. And the obvious opportunity here is to limit our disturbance activities at Iron Ridge and focus on areas where there isn't an impact on heritage. And so that's an obvious decision. We've done it. Clearly, that doesn't mean that we don't have those tonnes. They remain in place. Our closure plan for Iron Ridge will respect the fact that there is more ore in that pit. We reserve the right to look at potentially coming back in a different iron ore price environment. We've studied the potential for an underground iron ore mine given the higher grades and whether that would allow us to be more sensitive to heritage. However, the short term is we are going to successfully complete the mine plan at Iron Ridge that we always plan to do. It's a demonstration of Fenix' mining expertise, our ability to produce the products that we expected and more importantly, that our customers expected. It represents our respect for heritage and our strong partnership with the Wajarri Yamaji. And so notwithstanding that we were investigating and continue to investigate the expansion of the resource base and the fact that the ore body is larger, there are more tonnes there. The appropriate decision based on economic grounds and heritage is that we will complete the agreed mine plan. There are better tonnes for us to mine all over the place in the Weld Range, and that's our plan.

James Williamson from Bell Potter. He's got a series of questions, and Chris he kicks off with one for you. He says, with the growing business, how is Fenix managing its short-term liquidity requirements? Should we expect Fenix to continue using prepay mechanisms? Or is the company assessing alternative options?

Yes. So I think, hopefully, James, I have answered this throughout this call for you. I mean the other -- I guess, the further point that I would make on it is that we actually have a plethora of options with prepays. There's a lot of interest in providing them for this business. And in terms of financing more broadly, there's a lot of interest in providing appropriate finance to this business. So certainly, from -- as my role as CFO, it's really pleasing that we have options and we can choose what best suits this business. But hopefully, I've answered that question before for you, James.

He follows it. In 1H Group, C1 cash costs were AUD 75 WMT in the middle of the financial year '26 guidance range. How should we expect these to trend with the expectation that production will be even stronger in 2H?

Yes. I think, again, I've stated, which is -- which is very, very typical for a large bulk commodity producer as we see with the other producers, more tonnes equals lower costs. So that's what we would expect. So if we're doing more tonnes, we expect lower costs. But I mean, we're not looking at changing our guidance. We're very happy with that range of $70 to $80. Being at $75 halfway through the year is really pleasing, especially given we've just opened up a new mine, Beebyn-W11. And if you recall from FY '25, we opened up Shine as well. So when you're opening up mines, you've got a bit of pre-strip. -- you're certainly not at a full run rate. So your unit rates are higher. The fact that we have maintained midpoint of guidance opening up our third mine is very impressive. And I hope to see that we continue that going forward. So -- but our guidance will stay at $70 to $80. Hopefully, we're at the lower end of it. We'll see depending on our production volumes.

Look, I think as we said, we're reconfirming guidance. So the answer is yes, of course, we're confident. That's why we're guiding between $70 and $80. I think Chris has been quite modest. I would refer to the reality that in 2019, Fenix published a feasibility study for Iron Ridge that said we could produce 1.5 million tonnes per annum at a C1 cash cost of AUD 85 a tonne. I challenge any company to point to a feasibility study from 5 years ago and demonstrate that they're achieving a C1 cash cost lower than their feasibility study that they promised the market they would deliver. So while James is looking for us to identify that we're going to bring our current business down from $75 or is it still relevant, it is. We -- I think it's an amazing achievement that we have brought C1 cash cost down from in the 90s to regularly be within that range of $70 to $80. We target $75. We are looking -- the transition to mining hub at Beebyn has obvious advantages moving from 3 disparate mines to 1. And so we'll be looking at how we can demonstrate that cost saving in the guidance we provide in July for FY '27. But the structural change to our C1 cash costs will come when we complete the infrastructure that takes our business to 10 million tonnes a year and beyond. Between now and then, we are looking for incremental savings. Our main target is to stay within the guidance band across the 3-year production period. At this stage, we only guide FY '26. But to give some real clarity to you, James, at this stage, we'll be looking to try and obviously improve where we can. But in the light, if you look at any of the other iron ore miners, they've seen double-digit cost inflation year-on-year. We have not only maintained our costs but brought them down. That's the job that we'll keep aiming to do.

And John, while we've got you, James says, can you provide an update on the approvals for Beebyn-W10?

Well, look, I spoke about approvals generally. That's specifically to W10. Unsurprisingly, W10 is right next door to W11, the mine we opened up last year. It's a couple of hundred meters away. It's going to share a lot of infrastructure. There's no new road required. This is, as I mentioned earlier, quite a straightforward. To be really specific, we are expecting to get all the mining approvals in place for W10 in the second half of calendar 2026. So in the first half of FY '27, we expect to have those approval in place and be mining at W10, and that will be a key milestone for the market to watch, and that will demonstrate my earlier comments that we are good at getting approvals, and we're good at meeting our own and the market's expectations on what we promised.

Chris, one here from James. Has Fenix commenced discussions with potential financiers for the broader Weld Range funding package? And if so, how is the feedback to date?

Yes. So in terms of the broader Weld Range, so 10 million tonnes and what we talked about in our scoping study just before Christmas and that funding opportunity. The short answer is yes, absolutely, and there is interest. There's a lot of inbound interest. But really, that process will start ramping up when we release our feasibility study. So once our feasibility study comes out mid this calendar year, we've got a very detailed -- I mean, our scoping study was already very detailed for scoping study level in terms of being minus 10% plus 25% degree of accuracy, which is very tight for a scoping study. But the DFS, the feasibility study will be even more detailed, obviously, because it's a DFS. That's when financiers will really want to get involved, look at the detail. So that process will start ramping up mid this year and then will progress over the next -- from that next 6 months to 12 months.

The only thing I'd add that we've been working on financing opportunities for a long time. It obviously -- the opportunities, as Chris is describing, increase as our business increases. But I'd also point anyone interested to the public disclosure we've already made when we announced the game-changing Weld Range project deal with Sinosteel and the parent company, the largest steelmaker in the world, Baosteel. At the end of that announcement and as part of the agreements we've signed, there is a lot of mutual enthusiasm to work on the broader opportunities collaboration and specifically on financing and Bao's support for our future financing. And so an obvious opportunity and one that we are advancing is the China-based financing opportunities. We've seen larger iron ore mines do very, very low-cost renminbi-based debt deals. Given our strong relationship with Sinosteel and Baosteel, that is something that we have publicly disclosed and both sides of those operations have said they will collaborate on. And that's something that would provide a lot of confidence in our ability to fund growth for the mutual benefit, obviously, of Fenix and our partner, Baosteel.

This one, David at Petra for you, Chris, he says, any one-off costs over the next 12 months associated with the end of operations at Iron Ridge and Shine?

They're both different. So in terms of Iron Ridge, a clear advantage for us is that we already have a camp there, and we have other infrastructure in place that's been around for 5 years, and we've recently upgraded that and continue to grow that infrastructure. It's there, it's in place, and it's actually going to service Beebyn hub and the Madoonga hub as we ramp up. So that's clearly a benefit for Fenix in that we already have that infrastructure in place. So we're -- and the reason I say that is because we're not going to need to do rehabilitation at Iron Ridge in terms of our infrastructure that's in place because we're going to continue to use it. Accounting-wise, obviously, we provide for rehabilitation on the balance sheet. But in terms of actual costs for closure for Iron Ridge, nothing. There will be nothing. In terms of Shine, which we publicly stated is winding down and will close in the second half of this calendar year in terms of shipments might extend a little bit longer. There's actually -- there's more ore there. There's ore at Stage 2 and Stage 3. Very similar to John's comment earlier, it actually doesn't make sense for us to access that additional ore. There's quite a bit of pre-strip that needs to be done, not a lot. But relative to the opportunity to expand W11 and open up W10, it's a lot lower cost. That's why we're progressing the Bean Hub, W11, W10. And the Shine Stage 2, we can keep there and look to potentially access at a later stage. It doesn't feature in our mine plans in the next 2 years to 3 years. But at some stage, we may look at that depending upon circumstances. So the reason I say that is that there will be no closure costs or material closure costs for Shine at the end of this year. Again, we provide for it on our balance sheet. But as we sit here today for either mine, minimal, if not nothing.

John, next one for you from [ Jeniscopo ]. He says, what, if any, road maintenance charges in terms of dollars per kilometer are levied by Mid-West Councils on Fenix to use public roads?

So we are a participant in the voluntary road maintenance scheme of Main Roads. It's associated with the concessional licenses that we received from Main Roads to run the amazing 60-meter quad road trains that transport our ore to market. You can see at the back end of one behind Chris on his screen. And that is a commercial in confidence discussion. So we haven't publicly disclosed the rates and they're subject to regular negotiation. What I'd tell, Jen, is that those are obviously included in our haulage costs and they form part of our C1 cash cost. And this is about us making a contribution to fund the roads on which our trucks operate. So we have that arrangement for roads that are maintained by the main roads on the 500-kilometer journey from Iron Ridge to Geraldton. And we also have arrangements with shires for the shire roads that we operate on, where we contribute to and fund the maintenance on those roads and the regular repair on them. So that's obviously in our own interest because it means our trucks are looked after and running well, but it's also a responsible thing and benefits all of the road users on the sections we operate. The cost of that is a minimal cost included if you look at our overall haulage cost or our overall C1 cash cost. But Jim, the exciting thing is that if you look at the plans we have to expand to 10 million tonnes, we're very confident that in the future, we'll be running on a private haul road and augmenting our supply into Geraldton using the existing rail network. And that will remove the -- largely the charges that we're -- and the funding that we're providing for road maintenance because we won't be using public roads, and we'll take that pressure off the main road system, and we'll take that pressure off shires. So that's hopefully a response to your question. I appreciate Jen is a long-time shareholder, often sends questions through, really appreciate them. We encourage other shareholders and market participants. you've got a question, please send it through and we'll always respond.

And John, you've obviously -- you and Chris have obviously answered most of the questions because that is it in terms of questions. So any closing comments from you?

As always, I've got some comments, Mick.

We do want to get the lunch, too, don't forget.

Really excited about the platform we've built across the business, the integration of our mining, our logistics business and our port business into the cash flow generator that the half year numbers provide. It's an ongoing step change in our business. We look to keep rewarding the market with information about that journey. Iron ore is a very interesting space at the moment. I continue to be amazed at the opportunity we have in the Mid-West. The value of having 300 million tonnes of iron ore that's ready to mine attached to a supply chain that we're demonstrating we can incrementally expand. It's a huge value play. We're going to be disciplined and conservative about how we do that. Importantly, we remain focused on safe operations, something easy to skip over the ongoing focus we have on keeping our people, our communities safe and well and our focus on cost control, capital discipline and most importantly, and it's been a theme of Fenix since inception, unlocking the value we see in front of us. Congratulations to everyone within the Fenix team, all of our business units. Thank you for your work. Let's keep going, and thank you to shareholders for your support.

Lovely. Well, that does conclude today's webinar. Thank you, John. Thank you, Chris, for your time, and thanks to everyone for joining us.

Thank you.