BCI Minerals (ASX:BCI) Q3 2026 Earnings Call

0:00 Good morning everyone and welcome. I'm Dalek Bossoff and with me is our CFO, Steve Fuster. We're pleased to be joining you today for this March 2026 quarterly update. Before we get underway, I'd like to mention that today's presentation should be read in conjunction with our March 4th report. This is available on the PCI website. Also, as we move through today's session, Please feel free to add your questions to the live Q&A tab on the right-hand side of the screen. We will get you to respond to these questions at the end of the session. I also just want to start by, before I move to the next slide, just talk a little bit about the images on your screen. These are taken from our first crystallizer, and as you can see on the left-hand side, that's the salt pavement already forming at the bottom of the crystallizer.

0:52 And as of this morning, we're at 9 mm thick of pavements, This is more than double what we were last week at the same time. So a very timely time for BCI. We always begin with this slide because it reflects how we do things at BCI. with our values guiding every decision we make. This quarter was no exception. We delivered consistent progress across operations, construction and financial performance.

1:39 A clear demonstration of our values in action. Particularly our we do what we say value. This has been the commission of our primary personalisers with high-density drawing now from point 9. As of today, We have brine in the first two crystallizers and as you saw from that picture, salt patent is forming in those crystallizers. This milestone is a result of strong collaboration across our teams and contractors. While the sun has done its job in driving brine density, it's the preparation, coordination and commitment of our teams and contractors that enabled this system to form and the brine to flow. Mighty is now firmly established as a grouping salt operation.

2:30 And that values driven approach is exactly what underpins the business we're building at Mighty. Mighty is already Australia's largest solar salt operation and the third largest globally. Our focus is clean air, delivering high quality salts and associated minerals to our customers. With salt now in operation, We focus on achieving a safe and efficient ramp-up as quickly and as efficiently as we can. We believe salt that must represent a valuable opportunity to support additional product streams over time. And that's why Saltwater Fodash Trial is an important step towards proving it at our next major revenue stream.

3:15 Across the location and integrated port infrastructure, Marty is exceptionally well positioned to meet the expected rising demand across Asia. The port provides us connectivity to our customers, along with additional upside through its spare capacity, creating potential for third-party revenue and strategic partnerships over time. The March quarter marked a pivotal period for BCI, delivering outcomes that will shape the year end. In safety, we have continued to strengthen our key fatality prevention controls and maintain the focus on field leadership, completing over 318 leadership in the field safety interactions.

4:16 As mentioned earlier, we commissioned our first two crystallizers, along with the brine channels and the first two mist stations, marking another important step forward for the operation. During the quarter, the film also experienced two tropical cyclones, and I'm pleased to share with you today that there was no material impact to our people, plant, equipment or infrastructure, and we had no loss of brine. Construction has now progressed to 81% complete, with a salt wash plant advancing well and concrete installation works remaining on schedule. In relation to sulphate or potash, the KCMS trial crystallisers have transitioned from batch testing to steady state operations with performance in line with expectations.

5:06 On a corporate front, construction remains within budget and BZR continues to maintain a strong financial position. During the quarter, we drew $50 million from our syndicated debt facility, taking total debt for all at the end of March to $496 million. On the 11th of March 2036, we've reached a critical milestone. We've commenced flooding of our first two crystallizers with high debts implied, as you can see on the screen. This represents a critical step in the salt production process Enabling the formation of salt pavements and marking a significant milestone on our path to first salt production.

5:53 Strong asset reliability has continued to underpin our operational performance, supporting a safe and efficient movement of high pump volumes throughout the quarter. During the quarter tropical cyclers Mitchell and Narelle passed through the Māori site with no material impact to our people, plant, equipment or infrastructure and importantly we had no loss of Brian. Our cyclers preparedness and response plan was executed as designed allowing us to safely restart operations in a phased and controlled way by detailed inspections, asset validation, and the progressive recommissioning of key infrastructure.

6:45 The rainfall associated with tropical cyclone Narelle in March was significant. It had become three and four times the March average. This level of rainfall reduced the pulse density levels as one can expect and delayed the crystallizer lining program. Dry density is strongly influenced by seasonal evaporation rates During peak summer periods, we get better evaporation, and then of course during the cooler months, slower evaporation. The revised density profile, as you can see in blue on your screen, it's a blue shaded area, reflects this more gradual profile that you see here in the cooler months. We're basically expected to progress back into operational density range during the next two months. If you look on the screen, you can see the orange circle represents the pre-march density and then we are closing back on that level as we progress towards the end of April.

7:42 BCIC is refining also a March flamboyant self-production ramp-up profile based on our operational experience, the site performance and insights from BCIC's digital twin. As indicated in prior updates, our first self-manship timing remains weather dependent. We are assessing the effects of recent weather effects on salt production ramp up with a view of delivering the first salt on the ship in a timely and efficient manner. This year's mine operation is located in the pull drum where for decades salt has been produced. This chart that you can see on the screen is the annual export volumes from the tundra of salt for the last 10 years as published by the Danbury State Government.

8:34 We've overlaid on this chart the tropical cyclones that were either category 4 or category 5. As you can see from the historical data, there's no suggestion that there's any correlation between tropical cyclones and the export volumes in Western Australia. as you can see from the established salt producers and the volumes that they produce each year. During my ramp-up phase however, tropical cyclones may disrupt our salt operations and fill the salt pavement with churros and we have got enough inventory on hand. These are some of the pictures that I referred to earlier.

9:20 The one on the left is a plate that you place in the bottle to crystallise it. The stack gets pulled out and then we measure the thickness of the pavement with a vernier. The ability then to measure the two accurately to the millimetres. And as of this morning, the production report indicated that our pavement is now 9 millimetres thick. And that's double what thick it was of last Tuesday. So, positively, since the end of the quarter, the operations have resumed, pond density has been increasing, and salt is reforming enough for slices. This is a clear indication that the salt growth is on track, and this is something we're now seeing the progress of every day. We're continuing to make good progress towards our construction milestones, with Tildes Capital Extension now totalling $1.1 billion.

10:22 While construction progress Progress was interrupted during the quarter with cyclones Mitchell and Harrell. There was no material impact to appliance, equipment and infrastructure, and post-cyclone maintenance kicked off. During the quarter, lining of the first two crystallised cells was also completed, enabling a safer and more predictable harvesting environment. Lining of cells 3 and 4 also resumed on 12 April. The remaining crystallizer cells will continue to design progressively as we ramp up towards steady-state production. The design phase of the soft wash plants also continues to advance, reaching 92% completion, with major procurement items remaining on track for delivery in the June quarter. And construction is progressing alongside the commencement of concrete distillation works.

11:13 At the port of Cape Preston West, construction of the marine package continues to advance, with the contract rewards for the remaining detailed works, including navigation aids, verting and mooring files, and installation of catboards. And importantly, with all key approvals secured and contractual arrangements in place, I'm pleased to share with you that as of yesterday, we officially commenced bridging our channel of import. Steve will now take us through the financial highlights.

11:47 Yeah, thanks, David. Total construction costs now sit at over $1.11 billion, having spent $67 million this quarter. The largest packages of works that remain include the dredging, and you just saw a photo of that, the balance of the crystallised ceiling, which will happen progressively, and a salt wash plan. The progress being made on these three major construction areas continues to support our confidence of remaining on track and on budget. As mentioned earlier, we drew $50 million from our syndicated debt facility during the quarter. At the end of the quarter, BCI had available liquidity totalling $522 million.

12:38 With construction costs at $1.11 billion and our pre-revenue operating expenditure at $259 million, BCI has invested almost $1.37 billion in a night assault operations. When approximately $333 million requires a complete construction and available funding of $522 million, we remain fully funded to complete construction as well as meet our working capital requirements through ramp-up. Today, we have successfully completed 10 crawdowns totaling $496.8 million as at the end of March.

13:26 The Port of Cape Crest and West is a strategically valuable asset for BCI and for the region. This is a multi-user port designed to export around 20 million tonnes per annum of bulk commodities including salt, SOP and potentially At nameplate capacity, Marty's salt-only operation needs around 5.5 million tonnes per annum, leaving approximately 14.5 million tonnes of surplus capacity. This presents a real opportunity to support other proponents in the West Pilbara who require access to this valuable port infrastructure.

14:14 At the end of March, construction of the Murray Package and progressed to 94%. As David mentioned, we commenced stretching of the berth pocket and navigation channel this week. This is a critical step in enabling the loading of deep-sea, ocean-going vessels with industrial salt from the Marty operation. I'll now hand back to David to talk about this overview.

14:44 Thank you Steve. Sulphate of potash is a key by-product of our sulphur production, an important future revenue stream for BCI. SLP is a high-value premium fertilizer, different from the more common minerate of potash. Unlike MRP, SLP contains sulphur as well as potassium, making it ideal for high-value crops such as fruits, vegetables and nuts. It plays a critical role in improving crop quality, yield and food security. particularly in regions with nutrient-depleted soils. During the March quarter, the KTMS SFV crystallises transition from batch operation to continuous operation in steady-state performance, marking a very important step in proving up the process at scale.

15:33 We have also completed structured technical and commercial assessment of submissions for the SFV pilot fund preliminary geo-design, and this is the Class 4 capital investment. Following this process, two proponents have been selected to progress to the next phase, with work now advancing in line with our expectations. Subject to final outcomes, the successful proponent will then be engaged to commence the feed study, moving us one step closer to de-risking and progressing the SOP pathway. While our focus remains on safely wrapping up our operations and completing construction, we continue also to prioritise sustainability. This includes quarterly monitoring of the mangroves, samphire and algal mats, marine turtle monitoring and migratory shorebird surveys, to name just a few.

16:27 We have also continued to deepen our engagement with traditional owners, working closely with the Winawandi Aboriginal Corporation and its newly established commercial arm, Minari Enterprises, to progress initiatives that support sustainable economic participation. A key value of this is the development of a commercial partnership policy. This is designed to enable WACC members to establish viable, low-risk, service businesses aligned with on-country activities. This has already been brought to life in practice, with Wiriwaihe-owned businesses delivering an in-person cultural awareness training at our Perth head office here in February, presented by Yabara and Maraduna Elders, and this program will now also be rolled out across Perth and the Māori teams.

17:17 We're also proud to extend our partnerships with Karata Senior State High School in 2036, reinforcing the ongoing commitment to local education, delivering long-term positive outcomes for our communities. As we close out this quarter, we do so by consistently acquiring our values and doing what we said we would do. Our self-operation and production ramp-up is well-propressed as we create sustainable, multi-generational benefits for our shelters, local communities, as well as the broader Australian economy. This brings us to the end of the presentation. We will now move to questions. If you haven't already, please submit your questions in the Live Q&A tab on the right-hand side of your screen. Thank you.

18:09 Thank you, David and Steve. We've got a couple of questions that have been lodged. The first one is, can you elaborate on the differences between the primary and secondary crystallisers and how the salt moves to the secondary if it falls out of suspension in the primary?

18:25 That's a great question. Thank you. The primary crystalliser is where our rupture happens. So, some of those pictures that you saw on the screen was our primary crystallisers. That's where your others salt. When you've crystallised the majority of your salt in your brine, the brine then would flow through to your secondary crystallisers. The secondary crystallisers then used to drop out other chemical components before the brine water is then introduced into the KTMS crystallisers. That's the full circuit, of course, it's a B circuit. After the KTMS crystallises, the brine is then returned to pond 8 and that then recirculates back into pond 9 and then returned back into your crystallises.

19:11 The reason why that's designed in that way is to ensure that the maximum salt is extracted and of course KTMS SLP is extracted from the brine and that is then recirculated through the system until it's finally discharged into the ocean. Thank you, David. Steve, we've got a question around what proportion of our cash flow do you expect SOP to provide?

19:37 Yeah, SOP at the moment, our forecast is our salt onion business will deliver either of around $285 million and that's at full namesake capacity. When we get SOP up and running and if it achieves that 140,000 tonnes per annum, the production that we anticipate will is expected that will generate around about $100 million in EBITDA. But between now and when that EBITDA arrives, we need to complete the trial, the pilot program, which we feel confident will occur, and in all likelihood, an FID or final investment decision on the SAP plan is most likely going to happen towards the back end of next year after we run the trial for 12 months.

20:28 Excellent. Thank you, Steve. That concludes the questions that have been lodged.

20:33 Great. Thank you, everyone, for joining us today. Thank you.