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BCI Minerals

AU: BCI

AU$70m market cap

AU$0.18 last close

BCI Minerals has two major assets in Western Australia, including a 100% interest in the Mardie salt and potash project and a royalty-type interest in the Iron Valley iron ore mine operated by Mineral Resources.

Investment summary

BCI’s strategy is to deploy positive cash flow from Iron Valley and its c A$40m (end-Q320) cash balance to develop its flagship Mardie salt & potash project – to which end it made A$20m in disposals in Q320 (with A$10m receivable upfront). An optimised pre-feasibility study (PFS) on Mardie demonstrated a project IRR of 20% and a pre-tax NPV of A$560m (at a 10% discount rate) – equivalent to A$1.40/share – a 67% increase relative to the PFS. A DFS is now scheduled for June and a final investment decision in Q3 CY20, pursuant to which BCI is in funding discussions with (inter alia) the Northern Australia Infrastructure Facility.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 33.0 (14.4) (16.9) (4.3) N/A N/A
2019A 54.2 (2.6) (4.6) (0.8) N/A N/A
2020E 87.1 (10.4) (12.5) (3.1) N/A N/A
2021E 56.1 5.4 3.0 0.3 58.3 46.3
Industry outlook

In January, we valued BCI at 36.18c/share. However, this increased to 48.25c in the event that the iron ore price remained at c US$78/t for standard 58% Fe product (CIF). Since then, BCI has purchased more tenements around Mardie and has signed non-binding off-take agreements covering 100% and 90% of its first three years of salt and SOP output, respectively.

Last updated on 25/07/2020
Share price graph
Balance sheet
Forecast net cash (A$m) 20.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 2.9 29.6 (12.5)
Relative* 1.8 11.8 (2.3)
52-week high/low A$0.2/A$0.1
*% relative to local index
Key management
Simon Hodge CFO
Alwyn Vorster Managing Director