Page 10 - pd282-May20-mag-web_Neat

neWs

Four in a row for BCI and MRL

Mineral Resources has agreed to purchase
CI Minerals Ltd managing director payment on March 31. the Buckland iron ore project from BCI
BAlwyn Vorster has foreshadowed a BCI indicated the cash injection – for up to $20 million cash
potential role for Minerals Resources several years earlier than originally an-
Ltd (MRL) in the future construction and ticipated – would help offset its reduced on the business so far and we do not see
operation of the Mardie salt and potash income stream from Iron Valley in 2020 any major delays at this point, but it does
project after his company sold the last of after earlier agreeing to rebate 40% of its add that extra element of complexity.”
its remaining iron ore assets to the multi- net royalty from MRL towards required Completion of the DFS will mark the
faceted mining services group. capital works, including waste stripping start of a busy nine-month period for BCI
Mineral Resources has agreed to pur- and infrastructure upgrades. as it targets first construction activities at
chase the Buckland iron ore project from “We are not going to contribute any Mardie in late Q1 2021. In a bid to hit that
BCI for up to $20 million cash, including capital to the development, but we are milestone as planned, Vorster has his
$6 million upon formal completion of the basically offering them a discount on the team focused on four key work streams
transaction, and a 1% FOB revenue roy- royalty that they’re paying us,” Vorster – approvals, engineering, marketing and
alty on future iron ore mining from the said. funding.
134mt Bungaroo South deposit. “It means the $40 million we have in “We hope to have the mining leases
It is the fourth major deal struck be- the bank is earmarked for Mardie pur- and port leases in place by September
tween MRL and BCI – including its pre- poses and keeping the company afloat.” and that is also the target date for a
cursor companies BC Iron and Iron Ore A DFS on Mardie is due at the end board final investment decision,” Vorster
Holdings – over the past decade, begin- of next month. Last year’s updated said.
ning with Phil’s Creek, followed by Iron PFS indicated almost $500 million was “If we can get all that in place, we hope
Valley and more recently the Kumina needed to build an operation capable of to raise the equity part of the capital by
tenements. producing 4 mtpa salt and 100,000 tpa the end of the year. We then hope to
The sale of Buckland means BCI’s only sulphate-of-potash over a 60-year mine get ministerial approval, environmental
exposure to iron ore is through royalty life. That assessment included, for the approval and so on very early in 2021,
streams and the cashed-up junior now first time, BCI’s plans to develop its own which will then allow towards the end of
has a clear pathway to pursue develop- port facility on the Pilbara coast. Q1 2021 for construction to start.”
ment of Mardie, about 100km south-west Vorster said the DFS would include a BCI has marketing teams based in Be-
of Dampier. more detailed design of the port layout ijing and Singapore focused mostly on
Speaking to Paydirt last month, Vorst- and its development costings. placing the proposed Mardie salt prod-
er hinted at the possibility of a fifth trans- “All the Mardie-owned port facility, jet- uct with customers in the Asian chemical
action between BCI and MRL in the not ty, transhipping operation and so on, that market.
too distant future. has been engineered to a much higher “In very simple terms, the salt market
“With their expertise in building and level than what we have ever had be- is a GDP play so if the Asian economy is
operating, I am quite hopeful that there fore,” he said. ticking along, then salt demand and salt
could be a role for them in some shape “Of course, if you talk to the engineers prices are ticking along,” Vorster said.
or form on our Mardie project,” Vorster they will say you can’t build something “We may expect in the short term, so
said. “Not that we are selling the Mardie that has a DFS design, so naturally the in the next 6-12 months, some challeng-
project, but there will be many contracts, next phase beyond the DFS will be our es on the economic growth side in Asia,
both construction and operation, that I FEED phase and that will take it to 80- but there is no doubt that there will be
would hope someone like them could get 90% engineering and so on, but the DFS very strong stimulus packages coming
involved in.” is essential to lock in the scope and de- out again later this year in Asia. We hope
In announcing the sale of Buckland, signs. then the GDP growth rate will be healthy,
BCI confirmed that MRL had agreed to “The aim is still very much by June which will drive the chemical industry,
bring forward the first of two deferred $4 to have an announcement on the DFS. salt demand, salt prices and so on.”
million cash payments from the sale of We’re in a good position overall with the – Michael Washbourne
Kumina in late 2018. BCI received that COVID-19, it’s had a relatively low impact

Page 10 MaY 2020 aUSTRaLIa’S PaYDIRT