BCI completes Mardie DFS

BCI Minerals has completed a definitive feasibility study of its Mardie Salt and Potash project, establishing a positive case for the prospective Pilbara coast mine.

GR Engineering Services had served as lead engineer to the project, following the completion of a pre-feasibility study in 2018.

Announcing the results to the ASX this morning, BCI said the study had confirmed a mine life of more than 60 years, with production of 4.4Mt per annum of salt and 120ktpa of premium, salt-of-potash fertiliser.

The study had also demonstrated a net present value for the mine of $1.2 billion, with total revenue of $22 billion over the course of its life.

Production and port infrastructure was estimated to cost $580 million, with other capital costs, including that for project management and other contingencies, bringing total costs to $779 million.

A pre-feasibility study conducted in 2018 had previously estimated a cost of $335 million, with the increase attributable to higher estimated production as well as the need to develop associated port infrastructure.

Debt funding is currently being negotiated with the federal government’s Northern Australia Infrastructure Facility (NIAF), as well as Australian and international banks.

BCI says two non-binding, offtake memoranda of understanding have been signed with credible Asian buyers, accounting for 100 per cent of the project’s three-year salt production and 75 per cent of its five-year salt of potash production.

Approvals from the WA Environmental Protection Agency and native title agreements are well advanced, with construction of the mine scheduled for the second quarter of 2021.

BCI managing director Alwyn Vorster said the study had made a positive business case for the project.

“An investment of $20 million has been made over the past 18 months to deliver the high-quality DFS and we will continue to derisk [sic] and add value to the project over the next few months,” Mr Vorster said.

“This should further increase lender and investor confidence, supporting funding solutions.”

BCI chair Brian O'Donnell said completion of a positive feasibility study was cause to confidently go ahead with a final investment decision.

“The board views the DFS results as confirmation that the Mardie Project is a compelling value proposition with an attractive market opportunity, green credentials and no insurmountable obstacles to development,” Mr O’Donnell said.

“Attractive financial returns over many decades, and expansion potential from the new tenements, should result in substantial long-term value and dividends being created for shareholders.

“We believe Mardie will be a multi-generational asset for northern Australia, delivering new multi-user export infrastructure, tax and royalty revenues, jobs and indigenous engagement.”

BCI currently holds $42 million cash-on-hand, with 399 million shares on issue.