BCI Minerals

Website: www.bciminerals.com.au
Primary ticker: ASX:BCI
Stage of development: Development/Production
Primary minerals:Iron ore, Potash, Salt
Project to promote: Mardie Salt & Potash Project

Live financials

BCI Minerals is developing a salt and potash business supported by iron ore royalty earnings and divestment proceeds.

BCI’s Mardie Salt & Potash Project is a potential Tier 1 project located on the Western Australian coast. Mardie aims to produce 4Mtpa of high-purity salt and 100ktpa of sulphate of potash (“SOP”) via solar evaporation of seawater.

A DFS is due by late 2019, key approvals are expected by early 2020 and a final investment decision is targeted by Q1 2020.

BCI also receives royalty earnings from the Iron Valley mine (operated by Mineral Resources (ASX:MIN)), which totaled ~$18M in FY17 and ~$6M in FY18.

Petersons Research Report in March 2019 Edison Research Report in February 2019

Management Profile

Alwyn Vorster, Managing Director

Mr Vorster has 30 years’ experience with numerous mining houses in technical and commercial management roles covering the total supply chain from mine to market for iron ore, coal and other minerals. Recent roles include Regional Marketing Manager for Rio Tinto (Singapore); Chief Executive Officer of API Management (Iron Ore Project) and Managing Director of Iron Ore Holdings Ltd (ASX-listed company acquired by BCI in 2014).

Simon Hodge, Chief Financial Officer

Mr Hodge has more than 25 years’ experience in senior executive, corporate advisory and equity research roles. Prior to joining BCI, Mr Hodge was Chief Financial Officer and Chief Operating Officer for Quickflix limited, an ASX-listed company he co-founded. Previous roles include senior positions in corporate advisory with Poynton and Partners and in equity research with JP Morgan (London) and a major Australian stockbroker.

What is your rationale for attending 121 Mining Investment?

BCI is aiming to attract new long term shareholders who recognise BCI’s attractive current valuation and the long term value creation potential of the Mardie Salt & Potash Project.

What recent news would you like to highlight to investors attending?

1: GR Engineering appointed as lead engineer for the Mardie DFS.
2: WA State Government approves the concept of port facility at Mardie.
3: Net profit after tax of A$15.6M for the half year ended 31-Dec-19.
4: A$27M received from the sale of the Kumina Iron Ore Project.
5: WA Environmental Protection Agency endorses a timeline for Mardie environmental approval by late 2019.

What are your key goals for the next 3, 6 and 12 months?

3 Months:

1: Submit Mardie environmental review document.
2: Complete a PFS optimisation study for Mardie based on increased salt and SOP production and a Mardie port solution.
3: Complete construction of small scale trial ponds and commence evaporation trials.

6 Months:

1: Complete construction of an accommodation camp and key supporting infrastructure.
2: Commence construction of a large scale trial pond

12 Months:

1: Complete DFS in the Dec-19 quarter.
2: Secure initial offtake support.
3: Secure environmental approval in early 2020.
4: Make a final investment decision for Mardie in the Mar-20 quarter.

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Mardie is not subject to resource risk typically associated with mining projects given the input resource is seawater, which is abundant and has a known and consistent quality.

BCI is confident of securing all approvals and achieving funding solutions for the development of the Mardie Project in the next 12-months.

BCI’s iron ore royalty is dependent on the international iron ore price, but a minimum annual payment of $6M currently applies which protects the earnings downside risk.

In a sentence, what do you think makes your company such a compelling investment?

BCI is currently undervalued, with a market capitalisation of A$60M, cash of A$36M and royalty earnings from Iron Valley (A$6M in FY18 and A$18M in FY17, 95Mt Reserves).

BCI also believes the Mardie Salt & Potash Project can create long term shareholder value. Using an inexhaustible seawater resource and a production process powered mainly by natural solar and wind energy, Mardie is a sustainable opportunity to supply the salt and potash growth markets in Asia over many decades.