Bci Minerals Ltd · ASX:BCI
Bci Minerals — Corporate Update (February 2024)
67 slides from Bci Minerals's corporate update, Feb 1, 2024
Slide 1: Corporate Update and Equity Raising Presentation
Corporate Update and Equity Raising Presentation February 2024
Slide 2: Traditional Custodians Acknowledgement
BCI Minerals acknowledges the Traditional Custodians of the country throughout Australia and pays respect to the Whadjuk people of the Noongar nation as the Perth Traditional Owners, the Mardie Traditional Owners, the Yaburara and Mardudhunera people and the Robe River Kuruma people and the Iron Val
Slide 3: Important Notices
Important Notices Not for release to US wire services or distribution in the United States The following notice and disclaimer apply to this document and you are therefore advised to read this carefully before reading or making any other use of this document or any information contained in this docu
Slide 4: Important Notices (continued)
Important Notices (continued) Not financial product advice This document is not financial product advice and does not take into account the investment objectives, taxation situation, financial situation or needs of individuals. Before making an investment decision investors should consider the appro
Slide 5: Forward-Looking Statements
Important Notices (continued) Forward-Looking Statements This document contains forward-looking statements regarding project development and operations, production rates, project life, projected cash flow, capital expenditure, operating costs and other economic performance and financial condition as
Slide 6: Disclaimer
Important Notices (continued) Disclaimer Canaccord Genuity (Australia) Limited (Canaccord) is Global Coordinator, Lead Manager to the Entitlement Offer, Joint Lead Manager to the Placement, Underwriter & Bookrunner to the Offer, Ord Minnett Limited (Ord Minnett) is Joint Lead Manager to the Placemen
Slide 7: Corporate and Project Overview
BCI Minerals (BCI:ASX) Corporate and Project overview February 2024 7
Slide 8: Salt: a Valuable Commodity
Salt: a valuable commodity Salt (NaCl, sodium chloride) is composed of two essential elements that are used in thousands of manufacturing processes – sodium and chlorine. Downstream products that are produced with salt as a feedstock input include: • Glass • Paper • Paints • Aluminium • PVC As salt
Slide 9: Vision, Purpose, and Values
Our vision is to be a globally significant, sustainable Vision, purpose, and values 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: Be Par
Slide 10: Overview: Salt Projects in Western Australia
Overview Salt Projects in Western Australia Mardie is a fully integrated salt and sulphate of potash (“SOP”) project, located on the West Pilbara coast. Once completed, Mardie will be Australia’s largest solar salt project, and rank third in scale globally. Mardie will produce industrial-grade salt
Slide 11: Attractive and Sustainable Operational Performance
Attractive and sustainable operational and economic performance Long life project with potential 60+ years annuity style cashflows to support debt capacity and long-term equity returns RESOURCES PRODUCTION NPV • Abundant resource from seawater • Steady state production target of • Project NPV $2.6Bn
Slide 12: Robust Financials – Salt + SOP
Robust Financials – Salt + SOP1 Mardie Salt + SOP Sensitivity Base case assumptions Items Units Base Case Given the potential 60+ year project operating life, NPV is most sensitive to changes in discount rate, salt price, and A$/US$ exchange rate, and less Base Case Capital A$M, Nominal 1,421M sensi
Slide 13: Salt-First Base Case Assumptions
Salt-First 1 Base Case Assumptions This slide sets out the base case assumptions for the salt-first case, assuming that the SOP plant is not progressed. Mardie Salt-First Sensitivity1 Mardie is forecast to produce 5.35mtpa of salt at steady state Given the potential 60+ year project operating life,
Slide 14: Corporate Overview
Corporate Overview BCI is an ASX-listed industrial minerals business that is currently constructing the Mardie Salt and Sulphate of Potash Project (100% ownership) on the West Pilbara coast of Western Australia. First salt sales from Mardie are expected in 2026. BCI Summary Top Shareholders2 12 Mont
Slide 15: Health, Safety, and Wellbeing
Health, safety, and wellbeing Green loan certified and eligible Sustainability is a key pillar and enabler of BCI’s vision. The Mardie BCI places the highest priority on providing a safe and healthy project has been designed to minimise social, heritage, and working environment for all staff and con
Slide 16: Salt Market Overview
Salt Market Overview February 2024 16
Slide 17: Significant Salt Demand Growth Expected
Significant salt demand growth expected from Asia The chart below outlines Wood Mackenzie’s salt demand growth forecasts to 2030. Asian salt demand (2030)1 – volume (Mtpa) and growth (%) South Korea +26% China (inland) 6 11 +15% 64 Japan +22% 74 32 5 China (coastal) South Asia +31% 7 +20% 5 Taiwan +
Slide 18: Salt Offtake Discussions Underway
Salt offtake discussions underway China Discussions are also well advanced with a Chinese counterparty, Japan, Korea and Taiwan who has executed a non-binding Term Sheet with the following indicative offtake terms1: • 3-year term from date of first supply of salt • Anticipated volumes of 700kt salt
Slide 19: Salt Market Pricing
Salt market pricing Historical and Forecast Australian Salt Prices (Real US$/t)2,3,4 Wood Mackenzie and Project Blue1 are forecasting long term salt prices of US$62-67/t (real, 2023$) for Australian salt 90 delivered into Asia, up from the US$50/t forecast used in the initial Mardie FID study (Octob
Slide 20: The Mardie Salt and Sulphate of Potash Project
The Mardie Salt and Sulphate of Potash Project February 2024 20
Slide 21: Mardie Production Process
Mardie production process 99% Sun and Wind Energy 4. Salt Wash 5. Salt Plant Stockpiles C. SOP Storage Shed 7. Transhipper 6. 2.4km (12,000t) Jetty B. SOP Process Plant1 8. Ocean Going Vessel A. KTMS3 (up to Capesize) Crystallisers • Potential 60+ years project life with 99% of energy required for o
Slide 22: Australia's Salt Project History
Australia has a long history of producing salt, however no new salt project has been constructed, other than Mardie, since 1999. Mardie vs West Australian Operating Salt Producers Mardie Minerals Shark Bay Salt Dampier Salt Operating Company (100% BCI) (100% Mitsui) (68.4% RIO) Port Lake Location Ka
Slide 23: Australia's Largest Solar Salt Project
Australia’s largest solar salt project and third by scale globally Largest existing solar salt fields globally1 Guerroro Negro [Mexico] Site Conditions Port Shipping Hajipir [India] • Ideal climate and • Direct access to • 12,000dwt self- Mardie Salt/SOP project [WA] conditions to produce high Asian
Slide 24: Project Progress – an Overview
Project Progress – an overview 01 Overall project progress to 31 December 2023: 30.9% No Contingency Spent to Date 01 02 Marine Structure package Primary seawater Overall 47% complete, Jetty intake station 14.75% complete Complete 04 03 04 Ponds 1 to 5 Earth works complete, Mardie accommodation
Slide 25: Marine Package
Marine package McConnell Dowell has made significant progress on the jetty structure, with the marine structure package at 47% overall and jetty construction at 14.7%. . February 2024 25
Slide 26: Ponds and Transfer Station
Ponds and transfer station Ponds one to five earthworks are complete and construction activities on pond 6 have commenced. Rock armour placement has progressed to more than 80% along the gas pipeline corridor. Pump installation at transfer station 2/3 has commenced. February 2024 26
Slide 27: Milestones
Indicative Development Schedule: FSOS scheduled in 2026 2023 2024 2025 2026 2027 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Brine Transfer Stations & Distribution Circuit Brine & Waste Bitterns Sea Water Milestones Supply Brine Production Circuit / Pavement Production / Crystalliser
Slide 28: Mardie Infrastructure Provides a Cost Advantage
Mardie infrastructure provides a sustainable cost advantage Mardie's key competitive advantages in freight are its shorter distance to South-East Asian customers (relative to Mexican and Indian competitors) and the ability to ship via larger Ocean Going Vessels (“OGVs”). The ability to load Capesize
Slide 29: Global Salt Cost Curve
Tier 1 cost profile for salt production Global Salt Cost Curve (FOB)1 Chinese Rock 3rd Tier 60 Chinese Rock 2nd Tier Other Australia 6 50 Chinese Solar Other FOB, US$/t Salt Cost Curve Shandong Solar Tianjin Solar India 3rd Tier 40 Egypt Mardie Salt Only India 2nd Tier Mardie’s average free on board
Slide 30: Funding Structure and Investment Case
Funding Structure & Investment Case February 2024 30
Slide 31: Funding Structure
Funding structure BCI has entered into a A$981m project finance debt facility to assist with funding the salt first phase of the Mardie Project. Financial close of the project finance facilities is subject to satisfying typical project finance conditions precedent1, including completing an equity ra
Slide 32: Equity Funding Overview
Equity Funding Overview • $315 million (before expenses) fully underwritten Equity Raising, comprising: • a $255 million 1-for-1.19094 accelerated non-renounceable entitlement offer (“Entitlement Offer”); and • a $60 million institutional placement (“Placement”) • Placement to be conducted in two tr
Slide 33: Sources and Uses of Funds
Sources and Uses of Funds Project finance for Mardie, which includes all components of Mardie other than the SOP Plant Sources $M Uses $M NAIF Facility 490 Construction Costs – Sub-Total3 841 EFA Facility 160 Mardie Pre Production & Ramp Up Costs 159 Commercial Bank Facilities1 180 Financing Costs (
Slide 34: Pro-Forma Capital Structure
Pro-Forma Capital Structure 1. The Company has approximately 10.3m performance rights and 0.5m share rights on Indicative Capital Structure M A$M issue. Existing Shares on Issue1 1,215 2. Contemporaneously with the Equity Raising, AustralianSuper and Wroxby will convert their respective $30m Convert
Slide 35: Indicative Offer Timeline
Indicative Offer Timeline Event Date Event Date Trading halt and announcement of Equity Raising Thursday, 1 February 2024 Despatch Retail Offer Booklet Thursday, 8 February 2024 Thursday 1 February to Friday, Institutional Entitlement Offer Period Retail Entitlement Offer Opens Thursday, 8 February
Slide 36: Compelling Investment Opportunity
Compelling Investment Opportunity • Abundant resource from seawater creates long term resource life (potential 60+ year mine life) Generational asset • Australia’s largest solar salt project and third by scale globally – steady state production target of 5.35Mtpa of high-purity salt • Project NPV of
Slide 37: Further Information
BCl MINERALS Further Information
Slide 38: Key Operational Considerations
Key Operational Considerations1 • There is a risk that a final decision on the SOP plant is not reached and/or that funding for the SOP plant may not be available when required. In those circumstances a salt-only base case will be progressed. Further studies are required to understand the full opera
Slide 39: BCI Board of Directors
BCI Board of Directors Garret Dixon Stephanie Hon. Richard Court AC Managing Director Chairman Chris Salisbury David Boshoff Brian O’Donnell Gabrielle Bell2 Miriam Stanborough AM Majteles1 +40 years’ operational Former Premier and Treasurer Metallurgical engineer with experience across of Western Au
Slide 40: BCI Executive Team
BCI Executive Team Supported by first class partners: Managing Director David Boshoff Chief Financial Officer Project Director Head of External Relations General Counsel / Co Sec Steve Fewster Tim Deighton Arron Minchin Stephanie Majteles Prior CFO APM, Prior Project Director Prior Director, City of
Slide 41: Sustainability is a Key Pillar at BCI
Sustainability is a key pillar at BCI BCI is committed to the responsible use of natural resources, ensuring fair treatment of all people involved with, or impacted by, our operations, and the long-term wellbeing of our environment. Our key sustainability achievements in FY23: • Reduced design footp
Slide 42: Health & Safety is a Key Focus
Health & Safety is a key focus for BCI By focusing on leading indicators such as critical controls verification (“CCV”), we can better anticipate and address potential risks before they evolve, ensuring the health, safety, and wellbeing of our workforce, including our contracting partners. February
Slide 43: Asian Salt Market Outlook
Asian salt market outlook Asian Salt Consumption forecast (2022 to 2030)1 Asian salt consumption is expected to rise significantly over the next decade, mainly driven by increased demand from the Asian Salt Demand Forecast Asian Salt 2022 (mtpa): Demand 20301 (mtpa): chemicals sector1. +44mtpa (+25%
Slide 44: SOP Market Pricing
SOP market pricing • Sulphate of Potash is a high value fertiliser. Historical NW Europe SOP Price and Forecast Mardie SOP FOB • Argus forecast increased long term 2040 SOP price to Price US$666 (2022 FOB Mardie)1 which converts to US$708/t2 (Real US$/t) 1 (2023 FOB Mardie), from FID prices of US$57
Slide 45: Freight Market Pricing
Freight market pricing Historical Freight and Forecast Mardie Freight Rates • A dedicated port and jetty allows BCI to optimise shipment (Real, 2023$)2 sizes, with the flexibility to load vessels between 35k-180k dwt depending on customer requirements, weather, and cost. COVID-related disruptions to
Slide 46: Debt Funding Executed
Debt funding executed Northern Australia Northern Australia Infrastructure Facility (“NAIF”) to provide BCI with a loan facility on the following terms: Infrastructure Facility • A$490M loan facility. (Announced to ASX on A$490M 25 August & 20 • 15-year tenor. December 2023) • To be used for project
Slide 47: Project Finance Conditions Precedent
Project Finance Conditions Precedent (CP) Drawdown of the NAIF facility is scheduled for Jun-Aug 2024, with EFA, EDC and bank debt anticipated to be drawn for Nov 2024-Jan 2025. BCI is targeting to be able to satisfy all criteria for draw down to meet these timeframes1. The project finance documents
Slide 48: Targeted Steady State Production Rates
Targeted steady state production rates Salt and SOP Sales Ramp Up Targeted production levels: 6.0 1,000 Salt Production 900 5.0 5.35 Mtpa1 800 700 SOP 4.0 Salt Sales (Mtpa) SOP Sales (ktpa) 600 Production2 3.0 500 140 ktpa1 400 2.0 300 • Following a cost and design review, target Salt & SOP annual p
Slide 49: Appendix A: Convertible Notes
Appendix A: Convertible Notes 1. As announced on 28 April 2023, AustralianSuper Pty Ltd as trustee of AustralianSuper (AustralianSuper) and Wroxby Pty Ltd each separately entered into a convertible note subscription deed with BCI to be issued A$30 million of convertible notes (2023 Notes). Please re
Slide 50: Appendix B: Assumptions
Appendix B: Assumptions The following table contains the key assumptions used in the base case financial model, both at FID and under the updated base case: Updated base 31 Dec 2023 (Salt 31 Dec 2023 (Salt Assumption Units FID case &SOP) First) Base Case Capital A$M, nominal 905M 1,421M 1,421M 1,287
Slide 51: Key Risks
Key Risks Development of the Mardie Project BCI’s ability to successfully develop and commercialise the Mardie Project may be affected by numerous factors including but not limited to: macro-economic conditions, obtaining required approvals, ability to obtain sufficient funding, ability to procure c
Slide 52: Commodity Price and Exchange Rate Risks
Key Risks Cont’d Commodity Price and Exchange Rate Risks If BCI is able to successfully develop and commission Mardie, future Australian dollar revenue from Mardie will be subject to the sale of both salt and SOP products exposing BCI to commodity price and exchange rate risk. The future sale revenu
Slide 53: Offtake Risk
Key Risks Cont’d Offtake Risk There is no certainty that BCI will be able to obtain acceptable binding offtake agreements (based on counterparty, tonnage or price) in order to support equity raise and/or debt requirements. Offtake agreements may be entered into at a lower price than used in the base
Slide 54: Underwriting Risk
Key Risks Cont’d Underwriting Risk BCI has entered into an underwriting agreement (Underwriting Agreement) with Canaccord Genuity (Australia) Limited (Canaccord) pursuant to which Canaccord has agreed to fully underwrite the Placement and the Entitlement Offer, subject to terms and conditions of the
Slide 55: Environmental Approvals Risk
Key Risks Cont’d Environmental Approvals Risk BCI is working closely with the relevant State and Federal government departments and Ministers to secure timely environmental approvals for the Mardie Project. In particular, approval for the Optimised Mardie Project has not yet been obtained pursuant t
Slide 56: Tenure and Heritage Risks
Key Risks Cont’d Tenure While BCI expects that it will be able to satisfy the conditions for renewal of granted mining leases, there is no guarantee that granted mining leases will be extended or renewed further than 42 years (being the initial 21 year term plus a 21 year extension). Further, while
Slide 57: Data Security Risk
Key Risks Cont’d Data Security Risk It is possible that BCI’s procedures and systems may not stop or detect cyberattacks, data theft and hacking. Cyber security breaches may result in business interruption and loss of commercially sensitive data, which could have an adverse impact on BCI’s business
Slide 58: Liquidity Risk
Key Risks Cont’d Liquidity Risk The market for BCI’s Shares may be illiquid. As a consequence, investors may be unable to readily exit or realise their investment. Government and Legal Risk Changes in government, monetary policies, taxation and other laws can have a significant impact on BCI's asset
Slide 59: Labour Risks and Key Personnel
Key Risks Cont’d Labour Risks and Reliance on Key Personnel BCI believes that it has, in general, good relations with its employees and contractors. However, there can be no assurance that BCI’s operations or those of its contractors will not be affected by labour related problems in the future, suc
Slide 60: Global Conflict and Unknown Risks
Key Risks Cont’d Russia-Ukraine and Israel-Palestine conflict The ongoing Russian-Ukraine and Israel-Palestine conflicts have had and will continue to have a significant impact on global economic markets. Although BCI considers the current impact of the conflicts on BCI to be limited, given that the
Slide 61: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 62: International Offer Restrictions
International Offer Restrictions European Union This document has not been, and will not be, registered with or approved by any securities regulator in the European Union. Accordingly, this document may not be made available, nor may the New Shares be offered for sale, in the European Union except i
Slide 63: International Offer Restrictions
International Offer Restrictions The New Shares are not being offered to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the Financial Markets Conduct (Inciden
Slide 64: International Offer Restrictions
International Offer Restrictions No offering or marketing material relating to the New Shares has been, nor will be, filed with or approved by any Swiss regulatory authority or authorised review body. In particular, this document will not be filed with, and the offer of New Shares will not be superv
Slide 65: Underwriting Agreement: Key Terms
Underwriting Agreement: Key Terms Overview Canaccord Genuity (Australia) Limited (ABN 19 075 071 466) (Underwriter) is appointed as the exclusive underwriter, bookrunner and lead manager to the Entitlement Offer and Placement (together, the Offer). The Company has entered in an underwriting agreemen
Slide 66: Underwriting Agreement: Key Terms
Underwriting Agreement: Key Terms Termination Events Continued − (Incorrect or untrue representation): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect; − (Hostilities): there is an outbreak of hostilities or a material
Slide 67: About BCI Minerals
About BCI Minerals (ASX: BCI) Established in 2006, BCI Minerals (BCI) is an Australian-based company developing its 100% owned Mardie Salt and Potash Project. Our vision is to be a globally significant, sustainable industrial minerals business, with salt and potash as the initial focus. Our purpose