Bci Minerals Ltd · ASX:BCI
Bci Minerals — Investor Presentation (September 2020)
41 slides from Bci Minerals's investor presentation, Sep 14, 2020
Slide 1: Accelerating Development of the Mardie Salt & Potash Project
Accelerating Development of the Mardie Salt & Potash Project Entitlement Offer Presentation 14 September 2020 ASX:BCI www.bciminerals.com.au
Slide 2: Important Notices
Important Notices Not an Offer of Securities This document has been prepared by BCI Minerals Limited ABN 21 120 646 924 (“BCI” or “Company”) and is provided for information purposes only. This document has been prepared in relation to a fully underwritten accelerated non-renounceable entitlement off
Slide 3: Important Notices
Important Notices JORC Code The Mardie Salt and Potash Project aims to produce salt and sulphate of potash (“SOP”) from a seawater resource, which is abundant, inexhaustible, readily accessible and has a known and consistent chemical composition. The Australian Code for Reporting of Exploration Resu
Slide 4: Important Notices
Important Notices Disclaimer Neither Canaccord Genuity (Australia) Limited or Bell Potter Securities Limited (the “Joint Lead Managers”) nor any of their or the Company’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and
Slide 5: Why Invest in BCI?
Why Invest in BCI? Developing a Tier 1 salt and SOP project supported by iron ore royalties TIER 1 PROJECT CASHFLOW POTENTIAL Mardie has large scale, ~$10Bn1 over 60 years2 low cost & long life from Mardie ▪ Enterprise value of $60.2M3 ▪ Low valuation relative to peers DEVELOPMENT TEAM ATTRACTIVE MA
Slide 6: Equity Raise to Fund Early Construction Works
Equity Raise to Fund Early Construction Works 32 hectare trial pond (1 pump) Final seawater pump station (five pumps) 6
Slide 7: Funding for Early Construction Works
Funding for Early Construction Works Supporting accelerated project development ▪ $48M additional funding to commence Mardie early construction works1 likely to include: – Trial pond 0 5 10 – Seawater pump station kilometers – Major roads Power supply facility (initial) – Accommodation village – Ini
Slide 8: Equity Raise Overview
Equity Raise Overview Fully underwritten $48M non-renounceable Entitlement Offer Rationale and ▪ BCI is rapidly moving towards development of its 100% owned Mardie Salt and SOP Project since completing Summary its DFS in July 2020. ▪ The Company is seeking to raise gross proceeds of ~$48M (including
Slide 9: Equity Raise Overview
Equity Raise Overview Lead Managers, ▪ The Entitlement Offer is fully underwritten by Canaccord Genuity (Australia) Limited (AFSL 234666) Underwriters (“Canaccord”) and Bell Potter Securities Limited (AFSL 243480) (“Bell Potter”), who will act as joint lead managers on a 50/50 basis (Joint Lead Mana
Slide 10: Indicative Timeline
Indicative Timeline Institution and retail Entitlement Offer Event Date Announcement of Entitlement Offer Monday, 14 September 2020 Institutional Entitlement Offer opens Monday, 14 September 2020 Institutional Entitlement Offer closes 5pm (WST), Monday, 14 September 2020 Results of the Institutional
Slide 11: Indicative Early Construction Works
Indicative Early Construction Works1 Establish key infrastructure to accelerate Mardie development2 2020 2021 Nov | Dec Jan | Feb | Mar | Apr | May | June 1. Large Scale Trial Pond 2. Seawater Pump Station 3. Major Roads 4. Accommodation Village 5. Initial Power Supply 6. Long Lead Time Items e.g. p
Slide 12: Pro Forma Balance Sheet
Pro Forma Balance Sheet Entitlement ▪ Entitlement Offer net proceeds of 30 June 2020 30 June 2020 Offer Net approximately $45.8M after expenses of Pro-forma Proceeds approximately $2.1M $M $M $M Cash 41.5 45.8 87.3 ▪ Pro-forma available cash at 30 June 2020 on completion of the Offer is $87.3M Trade
Slide 13: Mardie Project Description
Mardie Project Description 32 hectare trial pond (1 pump) Final seawater pump station (five pumps) 13
Slide 14: Mardie – Key Features
Mardie – Key Features Tier 1 scale, cost and operating life QUALITY STRONG LARGE SCALE SUSTAINABLE LOW COST PRODUCTS CASHFLOWS ▪ 4.4Mtpa will be the ▪ 100-year life ▪ High purity salt ▪ Lowest quartile ▪ ~$10Bn cashflow3 largest Australian potential2 (>99.5% NaCl) salt operating cost over 60 years2
Slide 15: Large Scale Salt Project
Large Scale Salt Project Top tier global solar salt project1 Project footprint vs Sydney/Perth Salt Capacity (Mtpa) 0 1 2 3 4 5 6 7 8 Parramatta Guerrero Negro [Mexico] Manly Hajipir [India] Sydney Mardie Salt/SOP Project [WA] 4.4Mtpa Salt Dampier [WA] Sydney Heads Hub-Pak [Pakistan] to Parramatta J
Slide 16: Australian Salt & SOP Landscape
Australian Salt & SOP Landscape Mardie: ideal location to produce high-purity salt and SOP Western Australia – Salt and SOP Projects ▪ Pilbara has ideal climate to produce high purity salt – High temperature, high wind, low rainfall, low humidity – Proven salt production region since the 1960’s ▪ Fi
Slide 17: Mardie Project Overview
Mardie Project Overview 100% owned salt and SOP development opportunity Project Layout SITE CONDITIONS ▪ 100km2 clay soils – ideal to retain water ▪ High net evaporation rates (~3,000mm/year) PRODUCTION ▪ 9 evaporation ponds ▪ 34 salt and 18 SOP crystallisers ▪ Salt wash plant producing 4.4Mtpa salt
Slide 18: Mardie – Plants and Port Infrastructure
Mardie – Plants and Port Infrastructure SALT WASH PLANT SOP PROCESS PLANT PORT 18
Slide 19: Attractive Financials
Attractive Financials DFS delivered strong outcomes for key financial metrics PRODUCTION 60 YEARS ▪ Salt 4.4Mtpa FINANCIALS5 ▪ SOP 120ktpa ▪ NPV7: A$1,197M ▪ EBITDA: A$197Mpa (Salt 65%; SOP 35%) CAPITAL COST (A$779M) ▪ IRR: 15.3% ▪ A$580M direct capex ▪ A$199M indirect and contingency 60 YEAR CUMULA
Slide 20: Salt Cost Curve – Contestable Market
Salt Cost Curve1 – Contestable Market2 Mardie will be a low cost supplier of salt into Asia ▪ Mexican solar salt and Chinese rock salt the marginal cost suppliers to most Asian markets (~US$33/t) ▪ Mardie will be cost competitive with all Australian salt operations ▪ When SOP margin treated as a by-
Slide 21: Funding Strategy Advanced
Funding Strategy Advanced Positive engagement from NAIF and Banks on potential debt financing ▪ Base case is a conventional funding model of debt (65%) and equity (35%) ▪ Target is to secure debt commitments by end 2020 ▪ NAIF1: Formal DD phase; positive negotiations for potential long tenor facilit
Slide 22: Expansion/Optimisation Potential
Expansion/Optimisation Potential Adjacent tenement acquisition allows optimisation and future expansion* PROJECT OPTIMISATION (2020/21) PROJECT EXPANSION (2025/26) ▪ Reconfigure ponds 8 and 9, add a new ▪ New ponds and crystallisers, expand SOP Pond 10, relocate and expand Primary, processing/capaci
Slide 23: Strong Customer Support for Mardie
Strong Customer Support for Mardie MOUs covering a significant proportion of initial sales already in place SALT MOUs (Mt) ▪ 13 Salt non-binding MOUs signed throughout Asia 5.0 covering >100% of first 3 years’ production 4.5 4.0 ▪ 2 SOP non-binding MOUs signed covering 3.5 approximately 65% of first
Slide 24: Approvals & Tenure Well Defined
Approvals & Tenure Well Defined Native title arrangements in place, approvals and tenure on track for early 2021 ▪ 3 years of surveys completed and no material issues expected Environmental ▪ Public Environmental Review process underway ▪ EPA endorsement and Ministerial Approval targeted by early 20
Slide 25: Strong Government Support
Strong Government Support Mardie Project granted “Major Project Major Project Status” by the Federal Government, Status Granted providing approvals and project support WA Dept Jobs, Tourism, Science and Lead Agency Innovation (DJTSI) appointed as Lead Agency to facilitate approvals and tenure WA Min
Slide 26: Long Term Stakeholder and Public Benefits
Long Term Stakeholder and Public Benefits 1. BENEFITS TO WA & AUSTRALIA1 ▪ Corporate taxes: >$6Bn ▪ State royalties: >$600M ▪ Native title payments >$150M 6. SECONDARY PROCESSING 2. SIGNIFICANT EMPLOYMENT ▪ Australian first to produce OPPORTUNITIES commercial SOP from seawater ▪ 470 construction job
Slide 27: Indicative Project Schedule
Indicative Project Schedule1 Next Steps: Early works, FEED, approvals and funding 2020 2021 2022 2023 2024 2025 Q3 | Q4 Q1 | Q2 | Q3 | Q4 Q1 | Q2 | Q3 | Q4 Q1 | Q2 | Q3 | Q4 Q1 | Q2 | Q3 | Q4 H1 | H2 FEED2 APPROVALS FUNDING EARLY WORKS DEFINITIVE PONDS FEASIBILITY STUDY CRYSTALLISERS FID3 GROW SALT
Slide 28: The BCI Opportunity
The BCI Opportunity Developing a Tier 1 salt and SOP project supported by iron ore royalties MARDIE SALT & IRON VALLEY POTASH PROJECT ROYALTIES ▪ DFS confirms Tier 1 asset ▪ ~$100M market cap1 ▪ 89Mt Ore Reserves2 ▪ Pre-tax NPV7 ~$1.2Bn ▪ ~$42M cash and zero debt ▪ 6-8Mtpa production ▪ EBITDA ~$197M
Slide 29: BCI Minerals & Mardie Project – Key Risks
BCI Minerals & Mardie Project – Key Risks 32 hectare trial pond (1 pump) Final seawater pump station (five pumps) 29
Slide 30: Key Risks (1)
Key Risks (1) Development of the Mardie Salt and Potash Project The Company’s ability to successfully develop and commercialise the Mardie Salt and SOP project (“Mardie”) may be affected by numerous factors including but not limited to: macro-economic conditions, obtaining required approvals, abilit
Slide 31: Key Risks (2)
Key Risks (2) Underwriting Risk The Company has entered into an underwriting agreement (Underwriting Agreement) with Canaccord Genuity (Australia) Limited and Bell Potter Securities Limited (Bell Potter) (together, the “JLMs”), pursuant to which the JLMs have agreed to fully underwrite the Entitleme
Slide 32: Key Risks (3)
Key Risks (3) Port Approvals The construction of a new export facility at Cape Preston West is critical to Mardie to allow efficient export of salt and SOP to the various markets. Whilst the support of the Minister for Ports has been obtained for the creation of a new multi-user port at Mardie, ther
Slide 33: Key Risks (4)
Key Risks (4) Securities Investments and Share Market Conditions Generally There are risks associated with any securities investment. The prices at which the securities trade may fluctuate in response to a number of factors. Furthermore, the stock market, and in particular the market for exploration
Slide 34: Additional Information
Additional Information 32 hectare trial pond (1 pump) Final seawater pump station (five pumps) 34
Slide 35: Corporate Information
Corporate Information Capital Structure 0.30 4 Ordinary Shares 399M Share Price (10-Sep-20) $0.255 Share Price ($) 0.25 3 Volume (m) Market Capitalisation $101.7M Cash (30-Jun-20) $41.5M 0.20 2 Debt (30-Jun-20) Nil Enterprise Value $60.2M 0.15 1 0.10 0 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Shareholders
Slide 36: Iron Valley Mine
Iron Valley Mine Strong royalty payments to BCI ▪ Quarterly royalty type earnings from operating agreement with Mineral Resources Ltd ▪ 8Mtpa production; 89Mt Reserves1 ▪ Potential mine life of ~11 years ▪ 40% lump ore; 59% Fe average ▪ Since first production in 2014: – BCI received revenue: $290M –
Slide 37: Strong Board and Management
Strong Board and Management BOARD MANAGEMENT Brian O’Donnell Alwyn Vorster Tony Chamberlain NON-EXECUTIVE CHAIRMAN MANAGING DIRECTOR PROJECT DIRECTOR ➢ Banking and investment background ➢ Geology, Mining and MBA degrees ➢ Chemistry/Metallurgy degrees (PhD) ➢ Director, Finance and Investments - ➢ Kum
Slide 38: International Offer Restrictions
International Offer Restrictions The distribution of this document may be restricted by law in certain other countries. In respect of the Entitlement Offer, the following foreign offer restrictions apply: Canada (British Columbia and Ontario provinces) The Entitlement Offer will constitute an offeri
Slide 39: International Offer Restrictions
International Offer Restrictions Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong
Slide 40: International Offer Restrictions
International Offer Restrictions Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in co
Slide 41: T +61 8 6311 3400 E info@bciminerals.com.au W www.bciminerals.com.au
T +61 8 6311 3400 Level 2 GPO Box E info@bciminerals.com.au 1 Altona Street 2811West Perth W www.bciminerals.com.au West Perth WA 6005 WA 6872
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