Bci Minerals Ltd · ASX:BCI
Bci Minerals — BC Iron — H1 FY2014 Earnings Presentation
30 slides from Bci Minerals's earnings presentation, Mar 3, 2014
Slide 1: Cover letter to ASX announcing presentation
3 March 2014 For personal use only The Manager Company Announcements Office Australian Securities Exchange Dear Sir, BC Iron Limited (ASX:BCI) Following is a presentation on BC Iron Limited’s 2014 half-year results which will be given by Managing Director Morgan Ball at investor briefings in Melbour
Slide 2: FY2014 Half-Year Results
For personal use only FY2014 Half-Year Results Morgan Ball – Managing Director 1 ASX:BCI 3 Mar ‘14
Slide 3: Optimising the NJV | Paying dividends | Considering growth
For personal use only Optimising the NJV | Paying dividends | Considering growth 2
Slide 4: Attractive Investment Proposition
ATTRACTIVE INVESTMENT PROPOSITION For personal use only Scale & liquidity: Market cap and liquidity significantly enhanced post Dec-12. Now an ASX200 member TSR focus: Outperformed peers on TSR basis since Jul-12 Capital management: Robust balance sheet, conservative gearing, ongoing dividends
Slide 5: Half-Year Review
HALF-YEAR REVIEW For personal use only Operational Corporate Record half-year operational results at the NJV Included in S&P/ASX 200 Index in December Ore mined of 2.97Mt (BCI share 2.23Mt) 2013 Ore crushed of 3.03Mt (BCI share 2.27Mt) Strengthened Board and management team Sales of 3.14
Slide 6: Key Metrics
KEY METRICS For personal use only Six months ended Six months ended Item Variance 31-Dec-13 31-Dec-12 NJV Sales (M wmt) 3.14 2.28 38% BCI Share of Sales (M wmt) 2.46 1.14 116% BCI Average Realised CFR Price ($US/dmt) 119 100 19% Average exchange rate (AUD/USD) 0.925 1.015 (9%) BCI C1 Cash Operating
Slide 7: Operational Performance
OPERATIONAL PERFORMANCE For personal use only NJV Ore Mined (dmt) NJV Ore Processed (wmt) 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 NJV Ore Shipped (wmt) BC Iron C1 Cash Costs (A$/wm
Slide 8: BCI Financial Performance
BCI FINANCIAL PERFORMANCE For personal use only Revenue (A$m) EBITDA (A$m) 350 140 Iron ore 120 300 price decline 100 250 80 200 60 150 40 100 20 50 0 0 -20 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 NPAT (A$m) Cash and Debt (A$m) 80 250 25% NJV 7
Slide 9: BCI Financial Performance
BCI FINANCIAL PERFORMANCE For personal use only Earnings and Dividends per Share (cps) Return on Equity (%) 60 40% EPS DPS 35% Iron ore 50 30% price 40 decline 25% 30 20% 15% 20 10% 10 EPS 5% negative negative 0 0% H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY13 H1 FY14 H2 FY11 H1 FY12 H2 FY12 H1 FY13 H2 FY
Slide 10: EBITDA Variance
EBITDA VARIANCE For personal use only 180 Volume variance Price variance 160 120.2 (83.9) 140 75.0 (19.8) 9.2 120.3 120 (0.0) 100 80 60 40 19.7 20 - 9 EBITDA for H1 Revenue Costs Revenue - Costs - Costs - Other EBITDA for H1 FY13 Price and FX Price Linked Controllable FY14 Note: “Costs - Price Linke
Slide 11: Cash Balance Movement
CASH BALANCE MOVEMENT For personal use only 350 168.7 (22.0) 300 (6.1) (5.8) (41.6) 250 (37.1) 2.1 196.7 200 150 138.5 100 50 10 - Cash at Pre-tax Tax Capex and Price Loan Dividends Other Cash at 30-Jun-13 Operating Cash Exploration Participation Repayments 31-Dec-13 Flow Royalty
Slide 12: FY14 Guidance
FY14 GUIDANCE For personal use only FY14 guidance: NJV sales of 5.8-6.2Mt Platts CFR62 price of US$118/dmt on 27 Feb 13 NJV plans to operate at 6.5Mtpa for 9 months of the year and 4.5Mtpa for the 3 months during the January to March wet season LOM guidance of A$46-50/wmt FOB BCI share of sale
Slide 13: Corporate Overview
CORPORATE OVERVIEW For personal use only Capital Structure Share Price and Volume Ordinary Shares 124.0m $5.50 7 Share Price (at 28-Feb-14) $4.98 $5.00 6 $4.50 5 Market Capitalisation $618m Volume (m) Share Price $4.00 4 Cash (at 31-Dec-13) $197m $3.50 3 Debt (at 31-Dec-13) $66m $3.00 2 Enterprise V
Slide 14: Peer Comparison
PEER COMPARISON For personal use only Total Shareholder Return – 1 Jul 12 to Current Why has BC Iron outperformed its peers? 119% Quality project with low capital intensity Low risk 15% 9% Continued strong operational performance Repeated delivery against guidance (47%) (38%) (77%) Strong
Slide 15: Nullagine Joint Venture (NJV)
NULLAGINE JOINT VENTURE (NJV) For personal use only A producing DSO project with access to world-class infrastructure. Unincorporated joint venture – 75% BC Iron, 25% FMG BC Iron is the Operator and Manager of the NJV FMG provides rail & port services (through its wholly-owned infrastructure s
Slide 16: Mining – Overview
MINING – OVERVIEW For personal use only A fully contracted operation with low capital intensity. Contract mining by WATPAC, utilising Vermeer and Wirtgen surface miners Mine plan comprises four major deposits Currently mining Outcamp and Warrigal Bonnie East contributes from FY16 and Coongan
Slide 17: Mining – Overview
MINING – OVERVIEW For personal use only Mining Area Bottom of Orebody Water Table Shallow “pits” using surface mining Above water table - lower environmental 16 impact, no wet ore.
Slide 18: Mining – Surface Miners
MINING – SURFACE MINERS For personal use only Mesa edge bund wall Surface miner cut panel Ore block piles Wirtgen & Vermeer Surface Miners Rotating drum cutters – no drill & blast Environmental benefits, reduced run off 17 Provides primary crushing Surface mining results in reduced equipment
Slide 19: Processing and Logistics
PROCESSING AND LOGISTICS For personal use only Crushing / Screening (WATPAC) 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 vessels
Slide 20: Project Inventory
PROJECT INVENTORY For personal use only Project Inventory is assessing potential for increases in Reserves and mine life Targeting in-pit low grade… … and near- Focus on beneficiation of low grade (50-55% Fe) pit low grade Potential to increase Reserves and mine life from: Low grade within e
Slide 21: Bonnie Fines Overview
BONNIE FINES OVERVIEW For personal use only Bonnies Fines well accepted - consistent demand. “Bonnie Fines” pisolite sinter blend improves sintering productivity at the steel mill High calcined Fe driven by high Loss On Ignition (LOI) Low impurities, low ultra-fines and low moisture Low Al a
Slide 22: Bonnie Fines Marketing & Pricing
BONNIE FINES MARKETING & PRICING For personal use only BCI Attributable Tonnes BCI CFR Received Price vs. Platts CFR62 Price $200 Bonnie Fines $180 Iron Ore Price (US$/dmt) $160 $140 ~3.2Mtpa til 2018 ~1.3Mtpa til 2018 ~4.5Mtpa thereafter Nil thereafter $120 $100 Uncommitted ore Henghou commitment S
Slide 23: Iron Ore Outlook and China
IRON ORE OUTLOOK AND CHINA For personal use only Chinese fundamentals drive robust long term outlook for iron ore. GDP growth expected to remain strong (>7.5% p.a.) – significant in absolute terms given China is now the world’s 2nd largest economy New government positive about growth – Third Ple
Slide 24: Business Development
BUSINESS DEVELOPMENT Goals For personal use only Retain and enhance ability to pay dividends Generate value for shareholders (risk adjusted) via organic and inorganic opportunities Three Priorities Brazilian Exploration Projects Priority 1 – extend life of NJV (Project Inventory) BC Iron / C
Slide 25: Appendices
APPENDICES For personal use only APPENDICES 24
Slide 26: BC Iron Limited – Board
BC IRON LIMITED – BOARD For personal use only Board of Directors Tony Kiernan, Non-exec Chairman – formerly a solicitor Andy Haslam, Non-exec Director – a mining engineer with extensive experience in management and operation with 27 years operational and management experience. of Australian public c
Slide 27: Ore Reserves & Mineral Resources - Dec '13
ORE RESERVES & MINERAL RESOURCES - 31 DEC ‘13 For personal use only Ore Reserve Estimate NJV (BC Iron 75%, FMG 25%) Classification Mt Fe% CaFe% Al2O3% SiO2% P% S% LOI Proved 15.0 57.3 65.0 1.8 2.9 0.014 0.012 11.9 Probable 18.3 56.9 64.8 2.0 3.0 0.014 0.011 12.2 Total 33.3 57.1 64.9 1.9 3.0 0.014 0.
Slide 28: Important Notice
IMPORTANT NOTICE For personal use only This document has been prepared by BC Iron Limited (“BC Iron” or “Company”) to provide an update of BC Iron to investors and potential new shareholders. Past performance Past performance information given in this document is given for illustrative purposes only
Slide 29: Optimising the NJV | Paying dividends | Considering growth
For personal use only Optimising the NJV | Paying dividends | Considering growth 28
Slide 30: For personal use only
For personal use only ASX:BCI Level 1, 15 Rheola Street West Perth, WA, Australia Phone : +61 8 6311 3400 email : info@bciron.com.au www.bciron.com.au