Cashed-up BCI says no more equity raisings after iron ore sale
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Debt-free, cashed-up potash hopeful BCI Minerals (ASX:BCI) reckons it can get its flagship project through to a final investment decision without any more equity raisings.
BCI – formerly iron ore miner BC Iron – is in a strong position after selling its Kumina iron ore project in the Pilbara to dominant mid-tier Mineral Resources (ASX:MIN) for $35 million.
The savvy junior paid just $9 million for Kumina in late 2017.
“The sale of Kumina during the half-year was an excellent outcome for BCI, providing a $27 million cash injection and contributing to a positive net profit after tax of $15.6 million,” BCI boss Alwyn Vorster said.
“BCI’s $36.6. million cash position plus ongoing Iron Valley royalty earnings differentiates BCI from many other junior development companies and provides a solid platform to progress the Mardie salt & potash project to a final investment decision without the need for any further equity raisings.”
BCI first diversified into salt and potash following the steep drop in the iron ore price, and then decided to sell off its Pilbara iron ore projects after sinking to a $16.9 million loss in FY18.
Potash is an essential nutrient in fertilisers that protects food crops from disease and pests, and improves water retention, yield, taste and appearance.
BCI says it will consider selling its other iron ore assets and exploration tenements as it focuses on completing the Mardie definitive feasibility study.
Miners typically undertake up to three different studies when examining whether or not a project can be mined economically.
These are – from least to most comprehensive — scoping, preliminary feasibility (PFS), and definitive feasibility (DFS). The latter is sometimes called a bankable feasibility (BFS).
The company says this should be completed in the December 2019 quarter, with a final investment decision due by the March 2020 quarter.