Slide 1: Results presentation for full-year ended 30 June 2014
1 September 2014 For personal use only The Manager Company Announcements Office Australian Securities Exchange Dear Sir/Madam, RESULTS PRESENTATION FOR FULL-YEAR ENDED 30 JUNE 2014 Following is a presentation on BC Iron Limited’s 2014 annual results which will be given at investor briefings from 1 t
Slide 2: FY14 Financial Results Presentation
For personal use only FY14 Financial Results Presentation Morgan Ball (MD) and Chris Hunt (CFO) ASX:BCI 1 Sep ‘14
Slide 3: Attractive Investment Proposition
ATTRACTIVE INVESTMENT PROPOSITION For personal use only Scale & liquidity: Mid-cap iron ore producer, with increasing scale and liquidity. S&P/ASX 200 member TSR focus: Outperformed peers on TSR basis since Jul-12 Capital management: Robust balance sheet, conservative gearing, strong record of
Slide 4: 2014 Financial Year Review
2014 Financial Year Review For personal use only 3
Slide 5: FY14 Key Metrics
FY14 KEY METRICS For personal use only Item FY14 FY13 Variance NJV sales (M wmt) 5.79 5.00 16% BCI share of sales (M wmt) 4.30 3.14 37% BCI average realised CFR price ($US/dmt) 106 112 (5%) NJV C1 cash operating costs ($/wmt) 52 49 6% Revenue ($M) 471.4 328.3 44% EBITDA ($M) 152.3 111.7 36% NPAT ($M
Slide 6: NJV Operational Performance
NJV OPERATIONAL PERFORMANCE For personal use only Ore Mined (M dmt) Ore Processed (M wmt) 6 6 5 5 4 4 3 3 2 2 1 1 0 0 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 Ore Shipped (M wmt) C1 Cash Costs ($/wmt) 6 60 5 50 4 40 3 30 2 20 1 10 Not reported – in ramp up 0 0 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14
Slide 7: BCI Financial Performance
BCI FINANCIAL PERFORMANCE For personal use only Revenue ($M) EBITDA ($M) 500 160 400 120 300 80 200 40 100 0 0 -40 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 NPAT ($M) Operating Cash Flow ($M) 80 150 125 60 100 40 75 50 20 25 0 0 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 6
Slide 8: BCI Financial Performance
BCI FINANCIAL PERFORMANCE For personal use only Cash and Debt ($M) EPS and DPS (cps) / Payout Ratio (% NPAT) 200 80 100% Cash Debt 150 60 75% 100 40 50% 50 20 25% 0 0 0% 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 FY11 FY12 FY13 FY14 EPS (LHS) DPS (LHS) Payout Ratio (RHS) Return on Equity (%) 50% 40% 30
Slide 9: EBITDA Variance
EBITDA VARIANCE For personal use only Volume variance Price variance 250 121.3 (76.8) 200 20.4 (13.7) (11.7) 1.1 152.3 150 111.7 100 50 - FY13 EBITDA Revenue Costs Revenue - Costs - Costs - Other FY14 EBITDA Price and FX Price Linked Operational Note: “Costs - Price Linked” include the price effect
Slide 10: Cash Balance Movement
CASH BALANCE MOVEMENT For personal use only 350 190.0 (42.4) 300 (9.4) (8.0) (53.6) 250 (58.2) 200 2.0 158.9 150 138.5 100 50 - Cash at Pre-tax Tax Capex and Price Debt Dividends Other Cash at 30-Jun-13 Operating Cash Exploration Participation Repayments 30-Jun-14 Flow Payments and Interest 9
Slide 11: FY15 Guidance
FY15 GUIDANCE For personal use only FY15 guidance Breakeven Price Curve (62% Fe, CFR China Basis) 120 NJV sales guidance of 5.8-6.2M wmt 100 NJV C1 cash costs of $49-53/wmt (FOB) 80 60 BCI total cash costs of $60-68/wmt (FOB) 40 20 NJV capex of $30-35M (BCI share of $23-26M) 0 Roy Hill Atlas
Slide 12: Corporate Overview
For personal use only Corporate Overview 11
Slide 13: Corporate Overview
CORPORATE OVERVIEW For personal use only Capital Structure Share Price and Volume Ordinary Shares 124.3m $5.50 7 $5.00 6 Share Price (at 29-Aug-14) $2.79 $4.50 5 Market Capitalisation $347m Volume (m) Share Price $4.00 4 Cash (at 30-Jun-14) $159m $3.50 3 $3.00 Debt (at 30-Jun-14) $52m 2 $2.50 Enterp
Slide 14: TSR and Dividends
TSR AND DIVIDENDS For personal use only Total Shareholder Return – 1 Jul 12 to Current Why has BC Iron outperformed its peers? 44% Quality project with low capital intensity Continued strong operational performance (10%) Strong management and appropriate capital (11%) structure (62%) (69%) A
Slide 15: Nullagine Joint Venture Overview
For personal use only Nullagine Joint Venture Overview 14
Slide 16: Nullagine Joint Venture (NJV)
NULLAGINE JOINT VENTURE (NJV) For personal use only A producing DSO project with access to world-class infrastructure. Located ~55km north of FMG’s Christmas Creek Unincorporated joint venture – 75% BCI, 25% FMG BC Iron is the Operator and Manager of the NJV FMG provides rail & port services
Slide 17: Mining
MINING For personal use only Contract mining by WATPAC, utilising Vermeer and Wirtgen surface miners Reduced mining dilution Provides primary crushing Mesa edge bund wall Surface miner cut panel Ore block piles Mine plan comprises four major deposits – currently mining at Outcamp and Warriga
Slide 18: Processing and Logistics
PROCESSING AND LOGISTICS For personal use only Processing (WATPAC & Exact) Road Haulage (Toll & Roadtrim) Rail and Port Services (FMG/TPI) Simple crushing & screening Ore trucked via private sealed World class rail and port process road to dedicated stockyard at Access to Capesize vess
Slide 19: Bonnie Fines
BONNIE FINES For personal use only Highly sought after pisolite sinter blend Improves sintering productivity at the steel mill High calcined Fe, due to high loss on ignition Low impurities and low moisture Used at 20-30% level in some sinter blends BCI Share of Bonnie Fines ~3.2Mtpa til 20
Slide 20: Iron Ore Holdings Takeover Offer
For personal use only Iron Ore Holdings Takeover Offer 19
Slide 21: Transaction Details
TRANSACTION DETAILS For personal use only Structure Recommended off-market takeover for 100% of IOH shares 0.44 new BC Iron shares plus $0.10 cash for each IOH share BC Iron will enter into private treaty arrangements with IOH option holders to acquire all of their options Recommendation Off
Slide 22: Strategic Rationale
STRATEGIC RATIONALE For personal use only BC Iron to strengthen its Pilbara portfolio with acquisition of IOH. Enhanced asset Creates a leading mid-cap iron ore company with an attractive and complementary portfolio of 1 portfolio production and development assets in the Pilbara, the world’s best
Slide 23: Combined Group Pilbara Assets
COMBINED GROUP PILBARA ASSETS For personal use only Cape Preston East Port Maitland River Tenure 20 year lease Ownership 100% Status Feasibility complete Status Exploration/Concept Study Capacity 20 Mtpa Resources1 1,106Mt @ 30.4% Fe Nullagine JV Ownership 75% Status Operating Mardie Production Rate
Slide 24: Benefits to Shareholders
BENEFITS TO SHAREHOLDERS For personal use only The Boards of BC Iron and IOH believe the transaction delivers significant benefits to both sets of shareholders. Benefits for IOH Shareholders Benefits for BC Iron Shareholders Immediate and material value uplift through Secures long-term future in
Slide 25: Combined Group Overview
COMBINED GROUP OVERVIEW For personal use only Capital Structure Board Shareholder Breakdown Ordinary Shares 196.2m Tony Kiernan Morgan Ball Non-Executive Chairman Managing Director & CEO Share Price (at 29-Aug-14) $2.79 Andy Haslam Malcolm McComas Other IOH Non-Executive Director Non-Executive Direc
Slide 26: Iron Valley
IRON VALLEY For personal use only Near production mine expected to generate meaningful, low risk cash flows. Mine gate sale agreement with Mineral Resources Limited (MIN) IOH to retain tenement ownership and statutory obligations (incl. government royalties) MIN to develop and operate mine at
Slide 27: Buckland Project
BUCKLAND PROJECT For personal use only A potential mine with an independent infrastructure solution. Wholly owned project located in the West Pilbara region Ore Reserve of 134.3 Mt at 57.6% Fe1 Mineral Resource of 283.2 Mt at 56.5% Fe1 Potential 8 Mtpa operation for 15 years at 1:1 strip rat
Slide 28: Indicative Timetable
INDICATIVE TIMETABLE For personal use only Milestone Indicative Date Transaction announcement Monday, 11 August (Completed) Lodge Bidder’s Statement Friday, 22 August (Completed) Despatch Bidder’s Statement Monday, 25 August (Completed) Offer opens Monday, 25 August (Completed) Declare dividend Wedn
Slide 29: Appendices
For personal use only Appendices 28
Slide 30: NJV Reserves & Resources
NJV RESERVES & RESOURCES For personal use only CID Mineral Resource at 30 June 2014 (BC Iron 75%, FMG 25%) Classification Mt Fe% CaFe% Al2O3% SiO2% P% S% LOI Measured 21.2 54 61.7 3.4 4.3 0.014 0.012 12.5 Indicated 38.1 53.8 61.7 3.3 4.5 0.017 0.012 12.7 Inferred 46.7 52.1 58.8 5.4 6.6 0.024 0.018 1
Slide 31: IOH Reserves
IOH RESERVES For personal use only Buckland Project Ore Reserve at 30 June 2014 JORC Cut-off TonnesB Fe CaFe SiO2 Al203 P LOI Project Deposit Ore Reserve (% Fe) (Mt) (%) (%) (%) (%) (%) (%) Proved 23.2 58.3 62.9 5.8 2.9 0.15 7.4 Bungaroo South Probable 106.7 57.5 62.6 6.6 2.3 0.15 8.1 Proved - - - -
Slide 32: IOH Resources
IOH RESOURCES For personal use only IOH Total Mineral Resource at 30 June 2014 JORC Cut-off TonnesB Fe CaFe SiO2 Al2O3 P LOI Location Type Project Deposit Class (%Fe) (Mt) (%) (%) (%) (%) (%) (%) Central Indicated 50 216.3 58.4 63.0 5.1 3.1 0.18 7.2 Iron ValleyA Iron Valley Pilbara Inferred 50 42.8
Slide 33: Important Notices
IMPORTANT NOTICES For personal use only BC Iron Ore Reserves and Mineral Resources Disclosures The information in this announcement is extracted from the ASX announcement entitled NJV Ore Reserves and Mineral Resources dated 3 March 2014 and is available to view on http://www.bciron.com.au/investors
Slide 34: Important Notices
IMPORTANT NOTICES For personal use only This document has been prepared by BC Iron Limited (“BC Iron”) to provide an update regarding the companies to investors. Past performance Past performance information given in this document is given for illustrative purposes only and should not be relied upon
Slide 35: For personal use only
For personal use only Level 1, 15 Rheola Street West Perth, WA, Australia Phone : +61 8 6311 3400 Email : info@bciron.com.au Website : www.bciron.com.au