Bci Minerals Ltd · ASX:BCI
Bci Minerals — Investor Presentation (May 2019)
41 slides from Bci Minerals's investor presentation, May 20, 2019
Slide 1: Rapid Development of the Tier 1 Mardie Salt & Potash Project
For personal use only Rapid Development of the Tier 1 Mardie Salt & Potash Project Corporate Presentation 20 May 2019 www.bciminerals.com.au
Slide 2: About BCI Minerals
About BCI Minerals For personal use only ▪ Based in Perth, Australia 0.20 5 0.19 0.18 4 Share Price (A$) ▪ ASX listed as “BCI” 0.17 Volume (m) 0.16 3 0.15 0.14 2 ▪ Market cap of ~A$75M 0.13 0.12 1 0.11 ▪ A$35M1 cash and zero debt 0.10 0 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 ▪ Wroxby Pty Ltd – largest s
Slide 3: BCI Project Development History
BCI Project Development History BCI has a track record of funding, developing and operating mining projects For personal use only 1. Nullagine Joint Venture – Iron Ore: ▪ Developed from greenfields and operated from 2010-2015 ▪ BCI as manager with Fortescue as 25% partner ▪ BCI paid A$100M dividends
Slide 4: The Mardie Opportunity
The Mardie Opportunity Mardie is a Tier 1 long life project that can supply the For personal use only Salt and Potash growth markets in Asia Salt as chemical feedstock Asian Demand MARDIE SALT & POTASH PROJECT Sulphate of Potash as premium fertiliser Rapidly developing the 100% owned Mardie Project
Slide 5: Salt Facts
Salt Facts For personal use only ▪ Salt (NaCl) = 40% sodium (Na) + 60% chlorine (Cl) Industrial, ▪ >300Mtpa of Salt produced and consumed globally 184Mt, 54% ▪ Salt production methods: Other, De-icing, 40Mt, 86Mt, 25% Food, 12% 1. Solar evaporation of seawater or inland lakes 30Mt, 2. Hard rock mini
Slide 6: Salt – Supply Deficit by 2027
Salt – Supply Deficit by 2027 Mardie will target the growing chemical sector in Asia which requires high purity salt only 2017 (Actual) 2027 (Forecast) use Demand High Purity High Purity personal World Asia Asia Asia 325Mt 155Mt 70Mt 110Mt Supply For China China Supply Seaborne Seaborne Domestic Dom
Slide 7: Sulphate of Potash (SOP) Facts
Sulphate of Potash (SOP) Facts ▪ Global agricultural industry depends on three For personal use only ▪ SOP is a premium fertiliser used on higher value primary fertilisers – Nitrogen (N), Phosphate crops (fruits, berries, vegetables) (P) and Potassium (K) ▪ SOP (~US$500/t) has large price premium ov
Slide 8: Australian Salt & SOP Landscape
Australian Salt & SOP Landscape For personal use only ▪ Mardie will produce from an inexhaustible seawater resource: – Salt as primary product; and – SOP as by-product 1,000km ▪ Five large existing evaporative Salt operations in the Pilbara region of WA 800km – Ideal climatic conditions – Total prod
Slide 9: Mardie Project Layout
Mardie Project Layout ▪ For personal use only Vast area of mudflats with impermeable clay soils (130km2 / 13,000ha) Salt Plant SOP Crystallisers Salt Crystallisers ▪ Site layout designed ~5km inland to limit Export Jetty disturbance of coastal ecosystem P8 P7 SOP Plant ▪ 8 large ponds and 36 crystal
Slide 10: Mardie Port Facilities
Mardie Port Facilities ▪ For personal use only 1.5Mt salt stockpile capacity ▪ Export jetty to reach ~3m water depth ▪ Capable of exporting bulk salt and SOP as well as SOP in bulka bags ▪ Provision for third party users ▪ Transhipping to large vessels anchored 15 nautical miles offshore 10
Slide 11: Approvals & Tenure Well Defined
Approvals & Tenure Well Defined For personal use only ▪ 3 years of surveys completed and no material Environmental issues identified ▪ Environmental review document (ERD) submitted ▪ EPA endorsement scheduled by Dec-19 Heritage ▪ Land use agreements for production secured with Native Title claim gro
Slide 12: Attractive Project Economics
Attractive Project Economics1 Project Cash Flow (A$M) For personal use only Production ▪ Salt: 4.0Mtpa 300 (60 years) ▪ SOP: 100ktpa 200 100 - ▪ Salt & Port: A$400M (100) (200) Capex ▪ SOP: A$100M (300) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 to Revenue Opex Capex Net Cashflow 2082 Op
Slide 13: Mardie's Competitive Positioning
Mardie’s Competitive Positioning High Purity Salt Cost Curve – Seaborne to Asia (2027) Simplified SOP Cost Curve – Global (2027) For personal use only Marginal Cost / Price Cash Costs (US$/t CIF Asia) 40 Marginal Cost/Price differential Cash Costs (US$/t FOB) 400 Freight Mardie Mannheim Mardie cost
Slide 14: Recent Events – Progressing on Schedule
Recent Events – Progressing on Schedule ▪ ▪ For personal use only Key DFS engineering appointments DFS site activities progressing – Geotechnical drilling and test work program nearing completion Lead DFS Engineer Ponds & SOP Plant Salt Plant ▪ WA Government support for the Mardie Project – Departme
Slide 15: Project Timeline – to Production
Project Timeline – to Production For personal use only 2019 2020 2021 2022 2023 2024 Project DFS / Early FEED FID Phases Works Approvals Salt Plant Salt Ponds / Cryst. Construction Salt Sales Construction Port Construction SOP Cryst. SOP SOP Plant Construction Constr. Sales Project $25M Salt & Port
Slide 16: Project Timeline – Short Term
Project Timeline – Short Term Calendar Year Quarters Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 For personal use only Approvals Port Development Terms Settled Port Lease Settled Enviro Review Doc Submitted Environmental Approval Process Mining Lease Granted Heritage Approvals Project Milestones
Slide 17: Mardie – Unique Project Opportunity
Mardie – Unique Project Opportunity For personal use only 1. Market: Strong market outlook for salt & SOP 2. Project: Tier 1 asset – ideal location, long life, large scale & low cost 3. Sustainability: Inexhaustible seawater resource and 95% of energy requirements from natural solar and wind 4. Comp
Slide 18: Important Notices
Important Notices This presentation has been prepared by BCI Minerals Limited ABN 21 120 646 924 (“BCI”). For personal use only This document contains background information about BCI current at the date of this presentation. The presentation is in summary form, has not been independently verified a
Slide 19: Appendix A: Additional Corporate & Project Information
For personal use only Appendix A: Additional Corporate & Project Information
Slide 20: Corporate Information
Corporate Information For personal use only Capital Structure Shareholding and Trading Ordinary Shares 397.6M Wroxby Pty Ltd 29.1% Share Price (16-May-19) $0.195 Top 20 Shareholders ~55% Market Capitalisation $77.5M Number of Shareholders ~6,800 Cash (31-Mar-19) $35.4M Ave Daily Volume (Last 6 Month
Slide 21: BCI Board and Management
BCI Board and Management Brian O’Donnell Alwyn Vorster Tony Chamberlain For personal use only Non-Executive Chairman Managing Director Project Director ➢ Director, Finance and Investments ➢ Geology, Mining and MBA degrees ➢ Chemistry/Metallurgy degrees for Australian Capital Equity group (PhD) ➢ Kum
Slide 22: Mardie Projects Team
Mardie Projects Team For personal use only External Support Internal Mardie Team Tony Chamberlain Lead DFS Engineer Project Director ➢ Chemistry / Metallurgy degrees (PhD) ➢ WMC; BHP; Vimy ➢ Feasibility studies; Construction; Operations Ponds & Crystallisers Andrew Wydler Laurie Huck Warwick Jones E
Slide 23: Simplified Process Flow
Simplified Process Flow Applying latest processing technology to produce high purity products For personal use only Recycled NaCl Primary Secondary Ocean Concentration Ponds Crystallisers Crystallisers Waste Seawater Concentrated Potassium Brine Rich Bitterns (or further processing to produce Magnes
Slide 24: Proposed Development Strategy
Proposed Development Strategy For personal use only 2019 2020 2021 2022 2023 2024 Project DFS / Early FEED Phases Works Approvals Salt Construction / Commissioning Salt Sales Port Construction / Commissioning SOP SOP Construction / Commissioning Sales Contracting Model BCI Owners Team BCI Owners Tea
Slide 25: Iron Valley Mine – Royalty Earnings
Iron Valley Mine – Royalty Earnings ▪ For personal use only Quarterly earnings for BCI via royalty agreement with Mineral Resources Ltd (MIN) – BCI EBITDA of A$6M in first 9 months of FY19, A$6M in FY18 and A$18M in FY17 ▪ 95Mt Reserves; 6-8Mtpa iron ore operation; 50% lump production; potential min
Slide 26: Appendix B: Salt Information
For personal use only Appendix B: Salt Information
Slide 27: Salt and SOP Project Locations
Salt and SOP Project Locations For personal use only 27
Slide 28: What is Salt?
What is Salt? For personal use only ▪ Salt (NaCl) is 40% sodium (Na) and 60% chlorine (Cl) ▪ Essential for many aspects of modern living Global Salt Production India, Other Asia, ▪ >300Mtpa of Salt produced and consumed globally 32Mt 19Mt China, 90Mt Africa, 6Mt ▪ Salt is extracted via two main meth
Slide 29: Salt Uses
Salt Uses Salt is an essential feedstock for thousands of products For personal use only 29
Slide 30: Australian Salt Projects
Australian Salt Projects For personal use only ▪ Ideal climatic conditions for solar evaporation salt production Mardie Dampier,4.2Mtpa ▪ Currently ~15Mtpa production (Dampier Salt) capacity – 95% solar salt 4.0Mtpa (BCI) Port Hedland, 3.2Mtpa ▪ Key production region is the (Dampier Salt) Pilbara/Mi
Slide 31: Mardie Salt Product
Mardie Salt Product Mardie’s salt will be a high-purity product ideal for use in the Asian chemical industry For personal use only Target Salt Product Specs ▪ Chlor-alkali industry requires high purity salt NaCl 99.7% ▪ High purity salt demand in the Asian chemical Ca <0.04% industry forecast to inc
Slide 32: Salt – Supply Deficit by 2027
Salt – Supply Deficit by 2027 Mardie will target the growing chemical sector in Asia which requires high purity salt only 2017 (Actual) 2027 (Forecast) use Demand High Purity High Purity personal World Asia Asia Asia 325Mt 155Mt 70Mt 110Mt Supply For China China Supply Seaborne Seaborne Domestic Dom
Slide 33: Positive Dynamics in Asian High Purity Salt Market
Positive Dynamics in Asian High Purity Salt Market Supply deficit of ~20Mtpa forecast in next decade (~5 Mardie sized projects) For personal use only 125 SALT DEMAND DRIVERS 40Mtpa 20Mtpa Increasing Asian Increasing demand 100 New middle class for consumer & Asian 15Mtpa industrial products Demand b
Slide 34: Positive Price Outlook for Asian Salt Market
Positive Price Outlook for Asian Salt Market ▪ Opaque market with no index price For personal use only Average Import Values of Australian Salt (US$/t CIF) ▪ Downward pricing pressure over last decade 80 – average CIF price of US$43/t 75 70 – Primarily driven by increase in low cost and 65 lower pur
Slide 35: Appendix C: SOP Information
For personal use only Appendix C: SOP Information
Slide 36: Key Plant Nutrients
Key Plant Nutrients For personal use only ▪ Nitrogen (N) – from Urea fertilisers ▪ Phosphorus (P) – from Phosphate fertilisers ▪ Potassium (K) – from MOP and SOP ▪ Magnesium (Mg) and Sulphur (S) – from Magnesium Sulphate fertiliser 36
Slide 37: What is Sulphate of Potash (SOP)?
What is Sulphate of Potash (SOP)? ▪ Global agricultural industry ▪ Potassium improves crop yield & For personal use only depends on three primary quality, and increases resistance to fertilisers – Nitrogen (N) diseases Phosphate (P), and Potassium (K) ▪ Two main types of potassium fertilisers: – Mur
Slide 38: Crop Value Index
Crop Value Index For high value crops, a small yield increase from using quality fertiliser (i.e. SOP) For personal use only delivers high financial benefits High value / low volume Significant price premium for high quality (Crop Revenue / Fertiliser Cost) +US$1,200/ha from 2% yield increase Crop V
Slide 39: Positive SOP Market Dynamics
Positive SOP Market Dynamics More food needed from less land………… increases need for premium quality fertilisers For personal use only SOP DEMAND DRIVERS Increasing Asian Needing more and middle class better quality food New SOP Demand ✓ ✓ Likely Potential New SOP SOP Supply Projects Reducing Crop yi
Slide 40: SOP Price Forecast
SOP Price Forecast For personal use only SOP Price (US$/t FOB Taiwan) 700 5-Yr Average 5-Yr Average 600 (US$544/t) Forecast FOB US$/t 500 5-Yr Average 5-yr Historical Average 544 400 Forecast 5-yr Forecast Average 2018-22 526 300 5-yr Forecast Average 2023-27 541 200 100 BCI Price Assumption (PFS) 5
Slide 41: For personal use only
For personal use only T +61 8 6311 3400 Level 1, 15 GPO Box 2811 E info@bciminerals.com.au Rheola St West West Perth WA 6872 W www.bciminerals.com.au Perth WA 6005