CUF has 1.4Mt of reserved capacity at Geraldton Port under its agreement with Fenix Resources. Pic: via Getty Images.
Mining
Special Report: CuFe has signed an additional 12-month port contract for sheds and reserved berth capacity at Geraldton Port that will allow it to continue exporting high-grade iron ore from its JWD project in WA.
JWD has been going from strength to strength for CuFe (ASX:CUF) with mining operations in the September quarter achieving increased tonnes across the value chain at lower operating costs despite higher diesel fuel prices.
The company exported 160,402 wet metric tonnes (wmt) of iron ore in eight shared cargoes with other operating mines in the region during the quarter and reported cash receipts of $17.2 million from customers to deliver net cash from operating activities of $673,000.
In September, CUF finalised its acquisition of the remaining 40% of the project, which produces a high-grade (average 63.7% iron), low-impurity iron ore product that largely consists of high-value lump iron.
CUF has now signed up to be the foundation customer for Fenix Resources’ (ASX:FEX) port logistics business at Geraldton port with the 12 month contract having an effective commencement date of 1 October, 2023.
The contract covers the inload and outload of CUF’s product, provision of storage, and allocation of reserved capacity over the berth.
Reserved capacity allocation is 1.4Mt with 80% of the capacity subject to take or pay provisions. CuFe also has the ability to suspend or terminate on notice in the event of suspension of operations at JWD.
Certain third-party tonnes can also be processed through the shed in addition to CUF tonnes to maximise the use of the facility and reduce unit costs.
In addition, the company has entered an updated Port Services and Access Agreement with the Mid West Ports Authority, which operates Geraldton port, to cover vessel berthing and related activities.
“We are pleased to sign up as Fenix’s first third party customer following their purchase of Mt Gibson’s Geraldton Port infrastructure and are looking forward to working with them and MWPA for the ongoing efficient export of our JWD product,” executive director Mark Hancock said.
“The agreements will facilitate the continued export of our high-grade iron ore at a time where iron ore prices are performing strongly.
“CuFe’s ability to agglomerate certain third-party tonnes with its own under the contract allows us to increase utilisation of the shed, thus reducing our fixed costs and allowing shipments to build more quickly, improving our working capital cycle.”
This article was developed in collaboration with CuFe, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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