BCI locks in Final Investment Decision on Mardie salt-potash project, construction planned to start early 2022
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Following significant studies, approvals, market development and funding progress over a four-year period, the BCI Minerals (ASX:BCI) board has made a final investment decision (FID) on development of the large scale ‘Mardie’ salt and potash project.
The FID milestone comes 10 years after Mardie tenements were acquired for just $225,000 by BCI’s predecessor, Iron Ore Holdings.
BCI completed a scoping study for Mardie in July 2017 which demonstrated Mardie’s potential to be a Tier 1, globally significant salt asset.
Since then, four further studies have been undertaken culminating in the Optimised Feasibility Study of April 2021, confirming this Tier 1 potential with projected annual EBITDA of ~$260m and a project NPV7 (ungeared, real) of more than $1.6 billion.
Mardie is a multi-generational project that could generate earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $260m per year over an initial 60-year mine life.
Operating costs are estimated to be about $21.50/t of salt and $337/t of potash, placing Mardie in the lowest cost quartile with healthy profit margins.
The BCI board’s FID decision will see Mardie become the first new solar salt operation in WA in almost 25 years, and the first to produce salt and SOP from seawater.
The project has strong green credentials with the Indian Ocean the inexhaustible feedstock, and natural solar and wind energy providing 99% of the energy required to produce salt and SOP.
Mardie’s sustainable production of agricultural fertiliser from salt waste, pollution prevention and materials recovery and re-use were key criteria in obtaining Green Commercial Loan Facilities as part of its $740M project finance debt package.
This recently secured landmark $740M project finance debt package was the final criterion which provided confidence for the BCI board to approve FID.
In the near term, BCI expects to receive Part IV environmental approval for the initial project footprint in November 2021, and associated mining leases to be granted shortly thereafter.
Equity raising activities will kick off during this period, aimed at enabling main construction to start in early 2022.
“The BCI board is pleased to see the Mardie project reach this important milestone and we congratulate the BCI management team on delivering the project to this point,” BCI non-executive chairman Brian O’Donnell says.
“The final investment decision reflects our collective confidence that the project funding will be finalised in coming weeks, based on the expected approvals pathway and indications of interest received from existing shareholders, including Wroxby Pty Ltd, and potential new shareholders.
“The Mardie investment case is compelling with its large scale, low cost, and long operating life representing key attributes of a world class sustainable, multi-generational Tier 1 asset.”
This article was developed in collaboration with BCI Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.