CZR Resources (CZR) M&A Announcement summary

Deal rationale and strategic fit

• The all-scrip takeover creates a leading, fully integrated iron ore producer and logistics provider in Western Australia, combining proven mine-to-port operations with substantial Pilbara and Mid-West assets, notably the Robe Mesa Iron Ore Project.

• The transaction leverages Fenix's operational expertise and logistics capabilities to unlock value at CZR's Robe Mesa and other assets, enhancing scale, diversification, and market presence.

• The combined group expands its resource base to approximately 140Mt and ore reserves to 46Mt, providing a clear pathway to production growth and infrastructure advantages.

• Entry into the Pilbara region and access to strategic port solutions, including Geraldton and Ashburton, strengthens the group's logistics and export capabilities.

• The deal is unanimously supported by CZR's board and major shareholder Mark Creasy, who will become a significant shareholder in the combined entity.

Financial terms and conditions

• The offer is all-scrip, off-market, with CZR shareholders receiving 0.85 Fenix shares per CZR share (implied $0.26 per share), increasing to 0.98 Fenix shares ($0.30 per share) if 75% acceptance is reached by 21 March 2025.

• The offer represents a premium of up to 53% to recent CZR VWAPs, with an implied equity value for CZR of up to $70.8 million.

• Pro forma market capitalisation of the combined group is $287 million, with $56.2 million in cash and $55.4 million in borrowings.

• Fenix will provide CZR with a $2.4 million unsecured loan facility for working capital at 12% p.a.

• A $650,000 break fee is payable by CZR to Fenix under certain conditions.

Synergies and expected cost savings

• Integration of Fenix's mining, haulage, and port operations with Robe Mesa is expected to deliver significant operational synergies, cost efficiencies, and economic benefits.

• The combined logistics infrastructure is anticipated to support growth to 10 Mtpa and enable servicing of other bulk commodities.

• Fenix's established operational platform is expected to reduce funding, development, and execution risks for CZR projects.

• Low-cost haulage and established systems are expected to deliver additional value and operational upside.

• The Ashburton Link JV and existing port assets are expected to keep C1 cash costs below AUD 50/tonne.