Bci Minerals Ltd · ASX:BCI
Bci Minerals — BC Iron — Australian Mining Congress 2008
30 slides from Bci Minerals's conference presentation, Nov 19, 2008
Slide 1: Capitalising on our strengths in this iron ore market
For personal use only Capitalising on our strengths in this iron ore market Australian Mining Congress Sydney 2008 Mike Young Managing Director
Slide 2: Outline
OUTLINE For personal use only 1. BC Iron executive summary 2. Project location 3. Iron ore fundamentals 4. Iron ore pricing 5. Options and strategy 6. Bonney Creek Project 7. Summary 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY For personal use only ASX ¾ Listed ASX December 2006 - Maiden resource March 2008 Listed ¾ Major shareholders Æ ConsMinerals and Alkane Resources ¾ Cash on hand – circa $6.0M Nullagine ¾ Direct Shipping Ore in a series of Channel Iron Deposits (CID) Project ¾ Resource 28Mt @ 57.4%
Slide 4: Capital Structure
CAPITAL STRUCTURE For personal use only Shares on issue Trading 35.4 Restricted 24.0 TOTAL 59.4 Options 5.7 1.75 Fully Diluted 65.1 Top Shareholders Number % Total Consolidated Minerals 15.6 26% Alkane Resources 9.0 15% Warrigal Well with 40 m iron ore cliffs in background UBS Wealth Management 3.1
Slide 5: Board and Management
BOARD AND MANAGEMENT For personal use only Board Tony Kiernan Chairman (Non-executive) Mike Young Managing Director Non-executive Directors Garth Higgo Consolidated Minerals Terry Ransted Alkane Resources Steven Chadwick Consulting Metallurgist Management Blair Duncan General Manager Operations 5
Slide 6: Agenda: Project location
For personal use only BC Iron executive summary Project location Iron ore fundamentals Iron ore pricing Options and strategy Bonney Creek Project Summary 6
Slide 7: Location
LOCATION For personal use only Nullagine Project ¾ 1500 km2 holding in Pilbara ¾ Adjacent to existing and emerging infrastructure Bungaroo Creek Project ¾ Adjacent Rio’s Bungaroo CID ¾ Greenfields project ¾ Awaiting grant of tenure 7
Slide 8: Nullagine Project
NULLAGINE PROJECT For personal use only Bonnie Creek CID ¾ 28 Mt DSO 57.4% Fe (65% CaFe) ¾ +30 Mt CID at >56%Fe targeted ¾ Ultra-low P, High quality sinter blend ¾ Adjacent to FMG operations Nullagine River CID ¾ DSO & upgrade CID (~5 Mt) Shaw River CID ¾ Potential DSO, upgrade & detritals 8
Slide 9: Agenda: Iron ore fundamentals
For personal use only BC Iron executive summary Project location Iron ore fundamentals Iron ore pricing Options and strategy Bonney Creek Project Summary 9
Slide 10: Iron Ore Fundamentals
IRON ORE FUNDAMENTALS For personal use only Fundamentals are creeping back in ¾ Sudden supply surplus brings inflection forward from JY2012 to JY2009 ¾ Decreased supply through production curtailment underway (RIO, VALE, FMG) ¾ Consolidation/closure of high cost producers and marginal projects mitig
Slide 11: Iron Ore Fundamentals
IRON ORE FUNDAMENTALS For personal use only Fundamentals are creeping back ¾ In China seaborne : domestic sources of iron ore is 50:50 ¾ Domestic slow-down to ~40% may be sufficient to push market back into deficit ¾ China to lower steel export duties and accelerate stimulus packages ¾ Current port
Slide 12: Where Are Prices Going?
WHERE ARE PRICES GOING? For personal use only Hamersley Fines US$/t @ 58% Fe 90 80 70 Consensus -17%, -12%, -10% yoy 60 50 2007 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Source : Tennant Metals Pty Ltd) 12
Slide 13: Where Are Prices Going?
WHERE ARE PRICES GOING? For personal use only Hamersley Fines US$/t @ 58% Fe 90 80 70 Long Term US$55-60/t 60 50 2007 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Source : Tennant Metals Pty Ltd) 13
Slide 14: Where Prices Won't Go
WHERE PRICES WON’T GO For personal use only Iron Ore Cash FOB Costs for 2008 - by Site 100 Aust Fines FOB Price 2008 80 Port Loading US$/dry tonne Royalty Aust Fines US$60/t 60 Transport Pelletizing Processing Mining Aust Fines US$40/t 40 20 0 0 100 200 300 400 500 600 700 800 900 Cumulative Forecas
Slide 15: Agenda: Options and strategy
For personal use only BC Iron executive summary Project location Iron ore fundamentals Iron ore pricing Options and strategy Bonney Creek Project Summary 15
Slide 16: Strategies
STRATEGIES For personal use only Strategy for falling metal prices – reduce cost of recovery ¾ Decrease effects of revenue downside ¾ Mine higher grade Fe and/or lower impurities (Silica, Alumina, P, S) ¾ Blending strategies mine/prospect/region scale ¾ Parterships with mills – match ore with mill (
Slide 17: BC Iron's Strategy
BC IRON’S STRATEGY For personal use only Bonnie Creek Project ¾ Startup/Ramp up 1.5/3/5 Mtpa ¾ CapEx A$20 -30 M ¾ OpEx ~$40/tonne FOB ¾ Very low strip ratio – ore at surface ¾ Vermeer continuous miner ¾ In-pit secondary crushing ¾ Road haul to Christmas Creek/Cloudbreak ¾ Expand capacity from cash f
Slide 18: Bonnie Creek – Mineral Resource
BONNIE CREEK– Mineral Resource For personal use only Inferred Mineral Resource Estimate – March 2008 DSO Resource Estimate Prospect COG1 Zone Mt Fe CaFe SiO2 Al2O3 P S LOI1000 Outcamp 55.0 DSO 20.6 57.3 64.9 3.18 1.70 0.016 0.017 11.8 Coongan 55.0 DSO 7.4 57.8 65.5 2.39 1.86 0.013 0.017 11.8 TOTAL D
Slide 19: Iron Ore Deposits – Pilbara Fines Peer Comparison
IRON ORE DEPOSITS – Pilbara Fines Peer Comparison For personal use only DSO Fines Element/ Typical BCI CID BHP CID RIO CID FMG Deposits Compound Spec Bonnie Ck Yandi Robe R Chichester Fe >57 57.4 58.0 57.0 59.1 CaFe 65.1 64.2 62.8 64.0 SiO2 3–5 3.0 5.0 5.7 4.2 Al2O3 < 2.0 1.7 1.3 2.7 2.3 P < 0.10 0.
Slide 20: Bonnie Creek CID – Outcamp Prospect
BONNIE CREEK CID – Outcamp Prospect For personal use only 801,000E 802,000E 803,000E 804,000E 805,000E 7,562,000N 7,561,000N Scale 500 m Outcamp Well ¾ 21 Mt at 57.3% Fe ¾ Low strip ratio 0.8:1 ¾ Outcropping mineralisation 20
Slide 21: Bonnie Creek CID – Outcamp Prospect
BONNIE CREEK CID – Outcamp Prospect For personal use only Conceptual ‘pit’ outline Regional surface ¾ Shallow “pits” mainly above surrounding plains - mining ore from day 1 ¾Above water table - lower environmental impact ¾Low OpEx - low strip ratio, use of surface miners 21
Slide 22: Bonnie Creek CID – Mining
BONNIE CREEK CID – Mining For personal use only VERMEER TL1255 Terrain Leveler ¾ Drill & Blast not required ¾ Primary Crushing not required ¾ Mine Haul Trucks not required VERMEER TL1255 operating at Cloud Break (FMG) – photo by BC Iron 22
Slide 23: Infrastructure
INFRASTRUCTURE For personal use only Short Term Strategy ¾ Rail Haulage Agreement with Fortescue ¾ Utilise available rail/port capacity during FMG’s ramp-up phase 2010-11 ¾ Common user facility and/or lease of alternate available capacity 2009-10 Long Term Strategy ¾ Rail Haulage Agreement with Fort
Slide 24: The Right Mill - Blast Furnace
THE RIGHT MILL - BLAST FURNACE For personal use only Blast furnace ¾ Iron ore & coal are added at the top in alternating layers – lump & coke only ¾ Hot air is blasted into the bottom of the furnace ¾ Rising gases provide environment for reducing the iron oxides – Fe2O3 Æ FeO ¾ Descending burden mel
Slide 25: Niche Product – Sinter Feed
NICHE PRODUCT – SINTER FEED For personal use only Sintering ¾ All iron ore mines produce a lump (6 – 30 mm) and a fines (< 6 mm) product ¾ Only lump ore can be used in the blast furnace ¾ Synthetic lump is made by from fines by high temperature agglomeration - sintering ¾ Optimal physical properties
Slide 26: Sintering Quality
SINTERING QUALITY For personal use only Sintering Qualities of BCI Ore ¾ Independantly tested in China ¾ Blended with a typical fines sinter ¾ Using 0, 10, 20, and 30% blend ¾ Resulted in increased quantity and quality of sinter – “First Class” ¾ Test work results: ¾ Increased sinter yield ¾ Improve
Slide 27: Bonnie Creek Project
BONNIE CREEK PROJECT For personal use only Timing ¾ Baseline Environmental Surveys Completed ¾ Infill drilling Completed ¾ Resource Estimate Second Half 2008 ¾ Feasibility Study First Half 2009 ¾ Mining Approvals Second Half 2009 ¾ Construction commences Second Half 2009 ¾ Production First Half 2010
Slide 28: Summary
SUMMARY For personal use only Iron Market 9 Supply:demand ‘inflection’ arrives early 9 Response is decreased production/closure – prevents “free fall” 9 Chinese internal ROM 50% of ore supply grades ~28% Fe 9 Internal supply to soften on prices Æ internal deficit 9 Iron making tending towards tradit
Slide 29: Forward Looking Statements
FORWARD LOOKING STATEMENTS For personal use only This release may include forward-looking statements. These forward-looking statements are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other fac
Slide 30: For personal use only
For personal use only Mike Young, Managing Director