BCI Minerals Limited (ASX: BCI) is a mineral exploration company based in West Perth, Australia. Currently, BCI’s focus is on accelerating work at the Mardie Salt & Potash Project (100%-owned), a high-potential Tier 1 site situated on the West Pilbara coast in the heart of the key salt production region in Australia. The development of the salt and potash business is being advanced on the back of iron ore royalty earnings from production at the Iron Valley Mine.
On 17th May 2019, the company released the outcomes of the recently completed Pre-Feasibility Study (PFS) Optimisation Study for the Mardie Salt & Potash Project. The PFS report supported the technical and financial viability of the project, and delivered an attractive investment case, with key financial metrics as follows:
- Pre-tax NPV10 of AUD 560 million, IRR of 20% and annual EBITDA of AUD 155 million.
- Pre-tax NPV8 of AUD 875 million (8% discount rate used in majority of peer feasibility studies).
- Salt cash cost reduced by 19% to AUD 16/t free on board (FOB).
- Sulphate of Potash (SOP) cash cost reduced by 16% to AUD 211/t FOB.
- Total capital cost increased to AUD 498 million allowing increased production and development of a port at Mardie. It includes $401 million capex for salt production facilities and $ 97 million for SOP). A breakdown of capex to full production by project component is as follows:
Source: Company’s ASX announcement dated 17th May’19
In addition, the main changes to the development case for the PFS Optimisation Study includes of:
- Salt production increased from 3.5 Mtpa to 4.0 Mtpa.
- SOP production increased from 75 ktpa to 100 ktpa.
- Salt and SOP would be exported through a port at Mardie, free of road haulage costs.
- Operating life increased from 30 years to 60 years.
Following this milestone, BCI has initiated a Definitive Feasibility Study (DFS) and is also progressing with the project designs, tenure, environmental approvals and early construction works for the Project. The new development case will be incorporated into the DFS.
On 18th March 2019, the company announced the appointment of Perth-based engineering group, GR Engineering Services Limited as the lead engineer for the DFS.
BCI’s Managing Director, Alwyn Vorster pleasingly commented on the PFS Optimisation Study and explained that the Minister for Ports’ recent consent for the export facility at Mardie Project site and the PFS flowsheet optimisation work has led to setting of higher production targets.
With a market capitalisation of around AUD 77.53 million and ~ 397.61 million outstanding shares, the BCI stock price closed the market trading session, on 17th May 2019, by reaching its 52-week high of AUD 0.200, edging up 2.56% or AUD 0.005, with ~ 1.09 million shares traded in total.
Besides, BCI has also generated high attractive return yields of 44.44% for the past six months and 39.29% YTD. Of late, Seven Group Holdings increased its shareholding in BCI from 27.91% to 29.07%.