BCI is confident in its plans to chase a final investment decision (FID) for its Mardie salt and potash project in WA this year off the back of strong FY21 earnings.

The company delivered a tidy net profit (after tax) for FY21 of $22 million, up from $0.4 million in FY20, with record earnings from its Iron Valley mine of $69.5 million (up from $23 million in FY20) which is operated by Mineral Resources Limited (ASX:MIN).

With a cash balance of $110 million at 31 July 2021, zero debt plus the ongoing Iron Valley royalty earnings, BCI Minerals (ASX:BCI) reckons it’s in a strong position to advance the $1.2 billion Mardie project to FID this year.

The FID is subject to finalising statutory approvals so in the interim the company will continue investing its cash reserves in the project for the remainder of 2021 – with construction of embankment trial walls currently underway.

The company is targeting construction of the project – which would produce 5.35Mtpa of high-purity salt (>99.5% NaCl) and 140ktpa of sulphate of potash (SOP) (>52% K2O) via solar evaporation of seawater – in early in 2022.

Final ministerial approval pending

Construction of the project can only begin once ministerial approval and secondary approvals are secured.

But the company has already made progress this year, with the Western Australian Environmental Protection Authority recommending to the WA Minister for Environment that the Mardie project can be implemented as proposed in the Environmental Review Document.

That will be subject to certain conditions which are materially consistent with BCI’s designs, costings and implementation plans (as outlined in its initial definitive feasibility study).

Following the completion of the final public appeals process, the minister will consult with other WA government departments before making a decision.

Funding and the FID progressing

In December 2020, funding for the project got a boost with the Federal Government’s Northern Australia Infrastructure Facility approving a 15-year $450 million loan.

The NAIF loan will sit alongside other debt tranches with several commercial banks and other lenders progressing through credit approval processes.

Plus, BCI raised $47.9 million of equity with strong support from its existing major shareholders in the first half of FY21.

The company used the funds for early enabling works at Mardie – including the expansion of the accommodation village, access road upgrades, improved communications, establishment of construction water supply and storage, installation of fuel storage facilities, and an embankment wall trial.

 

 

 

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.

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