02/12/2010 - 00:00

BC Iron boss weighs in ahead of shipment

02/12/2010 - 00:00

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BC Iron managing director Mike Young took the opportunity to top up the emerging Pilbara iron ore miner’s coffers a little further last week, in the countdown to its first exports from Port Hedland.

BC Iron managing director Mike Young took the opportunity to top up the emerging Pilbara iron ore miner’s coffers a little further last week, in the countdown to its first exports from Port Hedland.

Mr Young exercised 500,000 options in the company in two equal tranches priced at $2 and $1.85 last week, tipping an extra $962,500 into the company’s cash reserves just a week after it raised $18.4 million from institutional and sophisticated investors in a raising priced at $2.30 a share.

He then cashed in on the stock’s higher market price, offloading his newly converted shares at $2.35 apiece to pocket just over $1.16 million – an immediate profit of $200,000 while maintaining his holdings at their pre-conversion level.

Mr Young holds just more than 1.12 million shares directly, and a further 145,834 shares through a family superannuation account.

The trades come as BC Iron enters the final stretch in its bid to become the Pilbara’s second junior producer after David Flanagan’s Atlas Iron.

After identifying a 100 million tonne resource of direct shipping grade iron ore at its Nullagine project, BCI struck a landmark joint venture deal with Fortescue Metals Group in mid 2009 to enable it to bring the project into production.

The joint venture deal gave Fortescue a half share in the Nullagine project, but also gave BCI guaranteed access to Fortescue’s port and rail infrastructure.

Mining began in early November and the first ore will be railed to Fortescue’s port facilities shortly, ahead of the first shipment to overseas customers in January.

Nullagine is expected to export 3mt of ore next financial year, ultimately rising to 5mtpa as Fortescue completes its own expansion of its port and rail operations in late 2012.

About 20mt of Nullagine ore is contracted for delivery to Hong Kong-based Henghou Industries.

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