Bci Minerals Ltd · ASX:BCI
Bci Minerals — Corporate Update (June 2023)
46 slides from Bci Minerals's corporate update, Jun 20, 2023
Slide 1: Update of the Mardie Salt and Potash Project and Base Case
ASX Release 20 June 2023 UPDATE OF THE MARDIE SALT AND POTASH PROJECT AND BASE CASE BCI Minerals Limited (ABN 21 120 646 924) (ASX: BCI) (‘BCI’ or ‘the Company’) is pleased to provide this update on its 100% owned Mardie salt and sulphate of potash (‘SOP’) project (‘Mardie’, ‘the Project’ or ‘the Ma
Slide 2: About BCI Minerals
For further information: Rika Potter BCI Minerals – Communications and Engagement Advisor T: +61 424 328 223 E: communications@bciminerals.com.au ABOUT BCI MINERALS BCI Minerals Limited (ASX: BCI) is an Australian-based mineral resources company which is developing an industrial minerals business, w
Slide 3: Update of the Mardie Salt and Potash Project and Base Case
BCI Minerals Update of the Mardie Salt and Potash Project and Base Case 20 June 2023 1
Slide 4: Acknowledgement of Country
Acknowledgement of Country BCI Minerals acknowledges and has deep respect for the ongoing physical and spiritual connection Aboriginal people have to the land associated with our projects. BCI acknowledges the Traditional Custodians of country throughout Australia and pays respect to the Whadjuk peo
Slide 5: Important Notices
Important Notices Not an Offer of Securities This document has been prepared by BCI Minerals Limited ABN 21 120 646 924 (“BCI”) and is provided for information purposes only. This document does not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation to purchase or
Slide 6: Important Notices (continued)
Important Notices (continued) Risks There are a number of potential known and unknown risks which may impact BCI’s ability to develop and operate the Project in accordance with the base case forecast presented in this announcement, some of which are beyond the control of BCI. BCI applies a risk fram
Slide 7: Welcome and agenda
Welcome and agenda BCI Minerals – an overview • Video Presenters: • Vision, purpose, and values • Our team • Sustainability The Mardie Salt and Potash Project • An overview • Construction progress • Approvals • Cost and design review Outcomes David Boshoff Kerryl Bradshaw • Optimisation outcomes Man
Slide 8: BCI Minerals: An overview
BCI Minerals An overview 6
Slide 9: BCI Minerals: video
BCI Minerals: video Visit the BCI Minerals website to learn more about who we are, what we do, and how we’re reshaping the face of resources in Western Australia. Click here to watch our corporate video 7
Slide 10: Vision, purpose, and values
Vision, purpose, and values Our vision is to be a globally significant, sustainable industrial minerals business, with salt and potash as the initial focus. Our purpose is to create sustainable value for stakeholders, by providing resources the world needs for generations to come. Our Values People
Slide 11: Committed to sustainability
Committed to sustainability Sustainability is a key enabler of BCI’s vision. Key sustainability attributes include: • Drawing from an abundant natural seawater resource • 99% of the energy required for operation to come from solar and wind (mainly for evaporation) • Sulphate of potash (SOP) fertilis
Slide 12: Health, safety and wellbeing
Health, safety and wellbeing BCI places the highest priority on providing a safe and healthy working environment for all staff and contractors. • To ensure safety performance continues to improve, all BCI employees have safety as a KPI • Fatality prevention is a key component of the Health & Safety
Slide 13: BCI Executive team – delivery experience
BCI Executive team – delivery experience DAVID BOSHOFF Managing Director David was appointed Managing Director in November 2022 and brings more than 20 years’ leadership experience in the mining industry, including the delivery of large capital projects. KERRYL BRADSHAW ARRON MINCHIN STEPHANIE MAJTE
Slide 14: The Mardie Salt and Potash Project
The Mardie Salt and Potash Project A progress update 12
Slide 15: The Mardie Salt & Potash Project
The Mardie Salt & Potash Project Mardie is a future tier 1 solar evaporation project under construction that will be a sustainable supplier of salt and potash for decades to come. The design and cost review has resulted in a more robust and resilient project, with an increased capital cost, and impr
Slide 16: Asian salt market outlook
Asian salt market outlook Asian salt consumption is expected to rise significantly from 2021 to 2030, mainly driven by increase in chemical sector predominantly Chloralkali and Soda Ash industries.1 The result of this is an anticipated deficit in supply. 1 Wood Mackenzie: Independent Salt Market Rep
Slide 17: Project Footprint v Perth and Sydney
Project Footprint v Perth and Sydney Mardie v Perth Mardie v Sydney The project is over 30km in length, and more than 100km2. 15
Slide 18: BCI at a glance: delivering the construction program since March 2022
BCI at a glance: delivering the construction program since March 2022 • BCI is progressing well on the Mardie Project development. • Major construction milestones have been achieved since commencement in March 2022. • Contracts and packages completed in 2023 are being delivered in line with or under
Slide 19: Mardie village
Mardie village The 400-bed accommodation and facilities are complete and have received a Certificate of Occupancy. 17
Slide 20: Primary seawater intake station completed
Primary seawater intake station completed The primary seawater intake station has been completed, with all pumps tested and control systems commissioned. BCI anticipates operation to commence, filling Ponds 1 and 2, in Q3 CY2023. 18
Slide 21: Evaporation ponds 1 & 2
Evaporation ponds 1 & 2 Ponds 1&2: civil works are complete, with rock armour planned to be placed in Q3, CY2023. 19
Slide 22: Transfer Stations
Transfer Stations Bulk earthworks completed on transfer station 2/3, which allows brine to be pumped from pond 2 to 3 over the gas pipeline. Pump station installation commenced. Transfer Station 3/4 bulk earthworks 90% completed1. 1. Progress based on amount spent as a percentage of contract award v
Slide 23: Evaporation ponds 3 - 5
Evaporation ponds 3 - 5 Construction of Ponds 3 to 5 has reached 85%1. Positively, the contract is forecast to come in 10% under the awarded value for the package, providing increased confidence in the estimates for the remaining civil works. 1. Progress based on amount spent as a percentage of cont
Slide 24: Roads: Upgrading North South Road
Roads: Upgrading North South Road Roads have been developed to provide permanent access and flood protection to key areas across the Mardie Project area including upgrades to Mardie Road. The North South Road and Mardie Road have reached ~50% completion1 at the end of May 2023. 1. Progress based on
Slide 25: Roads: Temporary Jetty Access Road
Roads: Temporary Jetty Access Road The Temporary Jetty Access Road has progressed to ~50%1 at the end of May 2023. The causeway is now open for construction traffic. 1. Progress based on amount spent as a percentage of contract award value under updated Mardie 23 Base case. Refer to slides 41 to 43
Slide 26: Marine Structures
Marine Structures McConnell Dowell mobilised in April 2023 to commence works on the marine package. Jetty lay down area progressed and first piles installed, signalling the commencement of the 2.4km jetty construction. 24 24 Transfer 2/3 bulk earthworks completed
Slide 27: Positive Stakeholder Engagement
Positive Stakeholder Engagement Lenders / Investors Approvals Native Title Tenure • Key financiers remain • EPA approved the initial project • Key Native Title agreements in place • All Definitive Feasibility Study (DFS) supportive of the Project1 scope footprint 2. • Port Indigenous Land Use Agreem
Slide 28: Cost and design review
Cost and design review BCI has undertaken a full review of all capital packages, development schedule, production profile and operational costs to complete a compelling new Base Case. Quantitative and technical De-risking activities have The design and cost review independent reviews by industry inc
Slide 29: Targeted steady state production rates retained
Targeted steady state production rates retained Targeted production levels are retained: Salt Production 5.35 Mtpa Salt and SOP Sales Ramp Up1 6.0 1,000 SOP Production 900 140ktpa 5.0 800 700 4.0 Salt Sales (Mtpa) SOP Sales (ktpa) 600 3.0 500 • Following the cost and design review, 400 target Salt &
Slide 30: Confidence in design
Confidence in design Of the $1,421M* Project Mardie base capital; • 33% has been awarded and either constructed or under construction, • 56% has a design maturity of 80% or Commissioned or completed ~15% Design complete above, and • Primary seawater intake station • the Salt Plant is nearing award.
Slide 31: The Mardie Salt and Potash Project: Base Case
The Mardie Salt and Potash Project Base Case 29
Slide 32: Review outcomes
Review outcomes Projected EBITDA is substantially 01 03 higher than the FID estimate, Salt plant location Crystalliser layout moved optimisation despite increased capital cost. Base Case 2023 FID 20211 Base Case 20231 Base Capital Estimate $ 905M $ 1,421M Total contingency reserve $ 110M $ 208M Base
Slide 33: The Mardie Salt and Potash Project: Market update
The Mardie Salt and Potash Project Market update 31
Slide 34: Salt market pricing
Salt market pricing Wood Mackenzie and Project Blue are forecasting long term salt price of US$621-67/t2 (2023$) for Australian salt delivered into Asia, from FID price of Historical and Forecast Australian Salt Prices (Real US$/t) US$49.60/t 3 90 Significant uplift in the long term price forecasts
Slide 35: SOP market pricing
SOP market pricing Argus forecast increased long term 2040 SOP price to US$666 (2022$ FOB Mardie)1 which converts to Historical NW Europe SOP Price and Forecast Mardie SOP FOB US$708/t2 (2023$ FOB Mardie), from FID prices of Price (Real US$/t) US$573/t3 1800 1600 The increase to SOP price forecasts
Slide 36: Attractive & sustainable economic performance
Attractive & sustainable economic performance Attractive project economics continue to support debt capacity and long-term equity returns Project Cashflows to CY50 (A$M, Real) The Mardie Project is anticipated to deliver1: 800 • Project NPV7$2.6Bn2 compared to FID of 600 NPV7$1.5Bn2 • Positive opera
Slide 37: Marketing strategy
Marketing strategy Offtake Partners • Offtake discussions are progressing well with several counterparties, reflecting the strong market growth for salt and SOP • Very active market and significant appetite in the commodity reflected by investment interest • BCI will be seeking to Other Markets sign
Slide 38: The Mardie Salt and Potash Project: Funding update
The Mardie Salt and Potash Project Funding update 36
Slide 39: Financing Progress – Key Messages
Financing Progress – Key Messages The current base case demonstrates strong equity returns and a robust debt capacity. • Discussions are well progressed with project financiers • BCI aims to execute project finance documents in Q3 2023, to fund all capex except the SOP plant • BCI intends to raise t
Slide 40: Funding and Project Timeline
Funding and Project Timeline* Project Finance Approval Brine Production First Salt on Agreements3, Q3, Achieved and Commence 2023 Ponds Fill Ship (FSOS) Commence 2H 2023 2024 2026 2027 Drawdown Equity Debt Finance $60M1 Con Funding SOP Plant H2, First SOP on Note2 Complete Q4, 2023 2024 Ship (FPOS)
Slide 41: In closing
In closing BCI is confident in the deliverability of the Mardie Salt and Potash Project • Skilled and highly motivated team • Technically robust, independently validated optimised project design • Attractive investment proposition with anticipated strong returns to investors for generations • Low-co
Slide 42: Thank you
THANK YOU 4040
Slide 43: Appendix: Risks
Appendix: Risks Project Risks There are a number of potential known and unknown risks which may impact BCI’s ability to develop and operate the Project in accordance with the base case forecast presented in this announcement, some of which are beyond the control of BCI. BCI applies a risk framework
Slide 44: Appendix: Assumptions
Appendix: Assumptions Material Assumptions In addition to the assumptions outlined throughout this document, BCI provides the following information in relation to the new Mardie base case. Capital costs: The capital estimate has been prepared using the Project controls work breakdown structure deriv
Slide 45: Appendix: Assumptions
Appendix: Assumptions The following table contains the key assumptions used in the base case financial model, both at FID and under the update base case: Assumption Units FID Updated base case Base Case Capital Estimate A$M, nominal 905M 1,421M Total contingency Reserve A$M, nominal 110M 208M First
Slide 46: Appendix: Sensitivities
Appendix: Sensitivities Base case pre-tax NPV7 sensitivity: 20% 10% 10% 20% Discount Rate: 9.1% (nom.) ±1% 2,049 (-584) 3,395 (+762) Exchange Rate: US$0.70 ±10% 2,103 (-531) 3,282 (+649) Salt Price: US$64.8/t LT ±10% 2,080 (-553) 3,186 (+553) Production: 5.35Mtpa & 140ktpa ±10% 2,101 (-533) 3,166 (+