Mines and Money Presentation Morgan Ball – Managing Director ASX:BCI 24 Mar ‘15
DISCLAIMER This document has been prepared by BC Iron Limited (“BC Iron”) to provide an update regarding the companies to investors. Past performance Past performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Forward-looking statements This document contains “forward - looking” statements or projections based on current expectations. Forward looking words such as, “expect”, “anticipate”, “should”, “could”, “may”, “predict”, “plan”, “will”, “believe”, “forecast”, “estimate”, “target” and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of iron production and prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements, opinions and estimates provided in this document are based on estimates and assumptions related to future business, economic, market, political, social and other conditions that, while considered reasonable by BC Iron, are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Such factors include, but are not limited to: operating and development risks, counterparty risks, iron ore price risk and a number of other risks and also include unanticipated and unusual events, many of which are beyond the companies’ ability to control or predict. No representation or warranty is made as to the accuracy, correctness, completeness, adequacy or reliability of any statements, estimates, opinions or other information contained in this presentation. The forward-looking statements only speak as at the date of this document and, other than as required by law and the ASX Listing Rules, BC Iron disclaims any intent, obligation or duty to update any forward looking statements, whether as a result of new information or developments, future events, results or otherwise. To the maximum extent permitted by law, each of BC Iron and its respective directors, officers, employees, agents and contractors disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered by any person (including because of fault or negligence or otherwise) through use or reliance on anything contained in or omitted from this document. Not financial product advice This document is for information purposes only and is not financial product or investment advice nor a recommendation to acquire BC Iron shares. The information in this presentation is in summary form only and is not necessarily complete. It has been prepared without taking into account the objectives, financial situation or needs of individuals and is not intended to be relied upon as advice to investors or potential investors. Before making an investment decision, investors or prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Nothing in this presentation should be construed as either an offer to sell or solicitation of an offer to buy or sell BC Iron securities in any jurisdiction. 2
ATTRACTIVE INVESTMENT PROPOSITION Cost focus : Achieving success in reducing operating costs At target production : NJV operating at 6Mtpa run-rate and Iron Valley operating at initial 4-6Mtpa run-rate Quality product : ‘ Bonnie Fines ’ a highly sought-after DSO sinter feed and attractively priced relative to Fe grade Growth options : Large Mineral Resource base across an attractive mix of operating / development projects and longer term projects and royalties Strong partnerships : Productive working relationships with Fortescue (NJV) and Mineral Resources (Iron Valley) Balance sheet : Strong cash position and declining debt Upside potential: Strongly leveraged to a recovery in Australian dollar iron ore prices. 3
CORPORATE OVERVIEW Capital Structure Share Price vs Iron Ore Price 6.00 250 196.2m Ordinary Shares Iron Ore Price (US$/t) 5.00 Share Price (at 16-Mar-15) $0.39 200 Share Price (A$) 4.00 Market Capitalisation $77m 150 3.00 Cash (at 31-Dec-14) $110m 100 2.00 Debt (at 31-Dec-14) $43m Share Price (LHS) 50 Enterprise Value $10m 1.00 Iron Ore Price (RHS) Options / Performance Rights 0.7m 0.00 0 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Shareholder Breakdown Enhanced Liquidity Research Coverage (as at 28-Feb-15) (excl. block trades) Wroxby Pty Ltd Ave. Daily Volume (‘000) 19.0% 2,937 2,748 Retail, Brokers and Other 61.2% 1,039 Institutional 596 496 Shareholders 152 18.8% BCI Directors H1 H2 H1 H2 H1 H2 1.0% FY13 FY13 FY14 FY14 FY15 FY15 4
BC IRON KEY ASSETS Cape Preston East Port Tenure 20 year lease Maitland River Status Updating feasibility study Capacity 20Mtpa Nullagine JV Ownership 75% Mardie Status Operating Production Rate 6Mtpa Buckland Project Reserves 1,2 29Mt @ 56.5% Fe Resources 1,2 97Mt @ 52.9% Fe Bungaroo South Ownership 100% Updating feasibility Status study Production Rate TBD Reserves 1 134Mt @ 57.6% Fe Iron Valley Resources 1 283Mt @ 56.5% Fe Mine gate sale Ownership with MIN Status Production Existing Port Proposed Port Existing Rail Proposed Rail Production Rate ~5Mtpa BCI Projects Major Roads Reserves 1 135Mt @ 58.5% Fe BCI Road Resources 1 259Mt @ 58.3% Fe Notes: 1. Mineral Resources and Ore Reserves are prepared in accordance with JORC guidelines. Refer to appendices for further detail. 2. Shown on a 100% basis. Reserves include DSO Reserves and BSO Reserves, but exclude DSO stockpiles of 0.5Mt at 54.6% Fe. 5
BC IRON RESERVES / RESOURCES Reserves (Equity Basis) 1 Tonnes Fe CaFe SiO 2 Al 2 O 3 P LOI Project (Mt) (%) (%) (%) (%) (%) (%) Nullagine 2 21.6 56.5 64.1 3.2 2.2 0.02 12.0 Buckland 134.3 57.6 62.6 6.5 2.4 0.15 8.0 Iron Valley 134.7 58.5 63.0 4.9 3.2 0.17 7.2 Total 290.6 57.9 62.9 5.5 2.8 0.15 7.9 Resources (Equity Basis) 1 Tonnes Fe CaFe SiO 2 Al 2 O 3 P LOI Project (Mt) (%) (%) (%) (%) (%) (%) Nullagine 73.0 52.9 60.1 5.5 4.4 0.02 11.8 Buckland 283.3 56.5 61.4 7.8 2.7 0.14 8.1 Iron Valley 259.1 58.3 62.7 5.4 3.2 0.17 6.9 Sub-total 615.4 56.8 61.8 6.5 3.1 0.14 8.0 Maitland 3 1,106.0 30.4 30.8 44.0 2.3 0.06 1.2 1. Mineral Resources and Ore Reserves are prepared in accordance with JORC guidelines. Refer to Appendices for relevant detail. 2. Includes DSO Reserves and BSO Reserves, but excludes DSO stockpiles of 0.4Mt at 54.6% Fe (equity basis). 3. Beneficiable feed ore (BFO) that requires beneficiation. 6
NJV – OVERVIEW A producing mine with access to world-class infrastructure. Located ~55km north of FMG’s Christmas Creek Unincorporated joint venture – 75% BCI, 25% FMG BC Iron is the manager of the NJV FMG provides rail & port and marketing services Capacity to export 6Mtpa – FY15 guidance of 5.2-5.6Mt C1 cost guidance of A$47-51/wmt (FOB) for Dec-14 to Jun-15 Targeting further sustainable cost savings Current mine life of ~5 years, with average remaining LOM strip ratio of 1.5:1 Reserves and Resources as at 31 Dec 2014 Mt Fe% CaFe% Al 2 O 3 % SiO 2 % P% S% LOI CID Resource 97.4 52.9 60.1 4.4 5.5 0.020 0.015 11.8 DSO Resource 35.2 57.1 64.6 2.2 3.1 0.016 0.012 11.6 DSO Reserve 23.6 57.0 64.7 2.0 2.9 0.015 0.011 11.8 BSO Reserve 5.1 53.8 61.5 3.0 4.4 0.018 0.010 11.8 DSO Stockpiles 0.5 54.6 - 2.8 4.2 - - - Note: refer to NJV Ore Reserves and Mineral Resources announcement on ASX dated 24 February 2015. 7
NJV – OPERATIONS Contract mining utilising Vermeer and Wirtgen surface miners Mine plan has four areas – currently mining at Outcamp and Warrigal Mine life of ~5 years, with average remaining LOM strip ratio of 1.5:1 Mining Processing Dry crushing & screening process Two crushing hubs; MOC (Outcamp) and Warrigal Building stockpile ‘safety net’ Road Haulage Ore trucked 60km via private sealed road to dedicated stockyard at Christmas Creek railhead 8 PowerTrans units – dual powered with 5 trailers and 400t payload Rail & Port World class rail and port, and access to Capesize vessels Dedicated NJV stockyards at railhead and port NJV capacity of 6Mtpa 8
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