Bci Minerals Ltd · ASX:BCI
Bci Minerals — Investor Presentation (March 2019)
40 slides from Bci Minerals's investor presentation, Mar 21, 2019
Slide 1: Driving the Mardie Project Towards Development
For personal use only Driving the Mardie Project Towards Development Corporate Presentation 21 March 2019 www.bciminerals.com.au
Slide 2: About BCI Minerals
About BCI Minerals For personal use only ▪ Based in Perth, Australia 0.25 5 0.20 4 Share Price (A$) ▪ ASX listed as “BCI” Volume (m) 0.15 3 0.10 2 ▪ Market cap of ~A$60M 0.05 1 ▪ A$36M1 cash and zero debt 0.00 0 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 ▪ Wroxby Pty Ltd - largest shareholder ~28% Share Pri
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 FMG as partner ▪ Dividends paid to shareholders: A$1
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. Mining of rock
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 3-5km inland to limit Export Jetty disturbance of coastal ecosystem P8 ▪ 6 pumps with 10,000l/s total capacity P7
Slide 10: Approvals & Tenure Well Defined
Approvals & Tenure Well Defined For personal use only Environmental ▪ Significant surveys completed and no material issues identified ▪ Environmental approvals on track for late 2019 (EPA endorsed timeline) Heritage ▪ Land use agreements (allowing production) secured with Native Title claim groups ▪
Slide 11: Attractive PFS Economics to Improve in DFS
Attractive PFS Economics to Improve in DFS PFS1 DFS OBJECTIVES1 For personal use only ▪ Salt: 3.5Mtpa ▪ Salt: 4.0Mtpa Production ▪ SOP: 75ktpa ▪ SOP: 100ktpa Capex ▪ A$335M ▪ A$400M Opex ▪ Salt: A$20/t ▪ Salt: A$16/t (FOB all-in cash cost basis) ▪ SOP: A$250/t ▪ SOP: A$250/t ▪ NPV10: A$335M ▪ NPV10:
Slide 12: Mardie's Competitive Positioning
Mardie’s Competitive Positioning High Purity Salt Cost Curve – Seaborne to Asia (2027) Simplified SOP Cost Curve – Global (2027) For personal use only Marginal Cost / Price Cash Costs (US$/t CIF Asia) Cash Costs (US$/t CIF Asia) 40 Marginal Cost/Price differential Freight Mardie 400 Mannheim Mardie
Slide 13: Proposed Development Strategy
Proposed Development Strategy For personal use only 2019 2020 2021 2022 2023 DFS + Salt Ponds + Project Salt Plant + Port Approvals + FEED Crystallisers Ramp up Phases Construction Early Works Construction FID SOP Cryst SOP Plant Construction BCI Owners Team BCI Owners Team Lead DFS Engineer (GR Eng
Slide 14: BCI is Well Funded to FID in Early 2020
BCI is Well Funded to FID in Early 2020 For personal use only 2019 2020 2021 2022 2023 Project DFS + Approvals Salt Ponds / Crystallisers FEED Salt Plant + Port Construction Ramp up Phases + Early Works Construction SOP Cryst. SOP Plant Construction Construct. Project Expenditure $25M $100M $300M Ca
Slide 15: 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 costs 3. Sustainability: Inexhaustible seawater resource and production utilising ~95% solar and wind energy 4. Company: B
Slide 16: 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 17: Driving Mardie Rapidly Towards Development
For personal use only Driving Mardie Rapidly Towards Development 17
Slide 18: Appendix A: Additional Corporate & Project Information
For personal use only Appendix A: Additional Corporate & Project Information
Slide 19: Corporate Information
Corporate Information For personal use only Capital Structure Shareholding and Trading Ordinary Shares 397.6M Wroxby Pty Ltd 27.6% Share Price (20-Mar-19) $0.155 Top 20 Shareholders ~50% Market Capitalisation $61.6M Number of Shareholders ~7,000 Cash (31-Dec-18) $36.6M Ave Daily Volume (Last 6 Month
Slide 20: Board and Management
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) ➢ Kumba;
Slide 21: 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 22: Mardie Timeline
Mardie Timeline Final investment decision targeted by Q1-20, allowing first salt sales by late 2022 For personal use only 2019 2020 Activities Q1 Q2 Q3 Q4 Q1 Q2 Environmental Surveys & Approvals Mardie Port – Gov’t Endorsement Mardie Port – Leases Pond, Crystalliser & Plant Design Port Design DFS Re
Slide 23: 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$3M in H1 FY19, A$6M in FY18 and A$18M in FY17 ▪ 95Mt Reserves; 6-8Mtpa iron ore operation; 50% lump production; potential mine life of ~13 y
Slide 24: Appendix B: Salt Information
For personal use only Appendix B: Salt Information
Slide 25: Salt and SOP Project Locations
Salt and SOP Project Locations For personal use only 25
Slide 26: 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 27: Salt Uses
Salt Uses Salt is an essential feedstock for thousands of products For personal use only Mardie Target Markets Paper Construction Glass ▪ Industrial/chemical/pharmaceutical: including glass, PVC, paper, textiles, medicines, oils etc. Aluminium & Metals Ceramics ▪ Water treatment: increases purity an
Slide 28: 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 29: WA Salt Operations
For personal use only WA Salt Operations 29
Slide 30: Mardie Salt Product and Target Markets
Mardie Salt Product and Target Markets 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% indu
Slide 31: 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 32: 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 M
Slide 33: Positive Price Outlook for Asian Salt Market
Positive Price Outlook for Asian Salt Market ▪ Downward pricing pressure in last 5 For personal use only Average Import Values of Australian Salt (US$/t CIF) years – average CIF price of US$43/t 90 – Primarily driven by increase in low cost 80 and low purity Indian production 70 ▪ Pricing recovery c
Slide 34: Appendix C: SOP Information
For personal use only Appendix C: SOP Information
Slide 35: Key Plant Nutrients
Key Plant Nutrients For personal use only ▪ Nitrogen – from Urea fertilisers ▪ Phosphorus – from Phosphate fertilisers ▪ Potassium – from MOP and SOP ▪ Magnesium and Sulphur – from Magnesium Sulphate fertiliser 35
Slide 36: 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 37: 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$1,200/ha from 2% yield increase Crop V
Slide 38: Positive SOP Market Dynamics
Positive SOP Market Dynamics More food needed from less land………… increases need for premium quality fertilisers For personal use only SOP DEMAND DRIVERS Increasing Asian Needing more and middle class better quality food New SOP Demand ✓ ✓ Likely Potential New SOP SOP Supply Projects Reducing Crop yi
Slide 39: SOP Price Forecast
SOP Price Forecast For personal use only SOP Price (US$/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 40: 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