BCI’s diversification is costing it a lot of money
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Junior battler BCI Minerals is back in the red after revenue plunged 50.5 per cent in the last six months of 2017.
The company (ASX:BCI) slumped to a loss of $6.1 million, from a profit of $6.6 million in the back half of 2016.
BCI, which was formerly known as BC Iron, has in the past struggled to keep its lights on after a steep drop in the iron ore price. To improve its odds, the company decided to diversify into potash and gold.
While the company says its Iron Valley mine “continues to deliver positive royalty earnings and cash flow for BCI”, revenue tumbled to $17.6 million from $35.5 million a year earlier.
But BCI attributes its loss to the investment being made across its projects.
The company spent $4.3 million on exploration and $9.5 million on the acquisition of the Kumina iron ore tenements and earn-in to the Carnegie potash project.
BCI also spent $1.5 million on project overheads and assessing new business development opportunities, including gold and base metals projects that it didn’t end up buying.
The company had $18.9 million in cash at the end of last year.