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BCI Minerals

AU: BCI

AU$77.5m market cap

AU$0.2 last close

BCI Minerals has two major assets in Western Australia, including a 100% interest in the Mardie salt and potash project and a royalty-type interest in the Iron Valley iron ore mine operated by Mineral Resources. It also has exploration tenements in iron ore and other minerals.

Investment summary

On 14 June, BCI announced that its EBITDA guidance from Iron Valley for FY19 is now right at the top of the range of prior expectations. During the first nine months of the year, BCI’s EBITDA from Iron Valley was A$6.0m from 5.5Mt of material shipped (ie A$1.09 per tonne). In the light of the continued strength of the iron ore price in the aftermath of the Brazilian tailings dams’ disasters, it has now revised its guidance for the full year from A$6–12m to A$11–12m (or c A$1.57 per tonne, given our FY19 production estimates), implying EBITDA of A$5–6m (or c A$2.66–3.19/t) in Q419 alone. As a result, we have upgraded our EBITDA forecasts for BCI’s Iron Valley stream of income for FY19 and FY20. Consistent with the strong iron ore price environment, between March and May, BCI’s cash position declined by only A$0.6m, despite continued investment into Mardie.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 64.3 9.1 6.0 1.9 10.3 5.2
2018A 33.0 (14.4) (16.9) (4.3) N/A N/A
2019E 63.8 (3.2) (6.0) (1.1) N/A N/A
2020E 85.6 (10.7) (13.1) (3.3) N/A N/A
Last updated on 25/07/2019
Industry outlook

Considering all of its assets, we value BCI at 37.56c/share. In the meantime, it has appointed a trio of respected consultants to contribute to its DFS (expected in Q4 CY19), while the decision to build a port at Mardie increases BCI’s chances of concessional debt funding via Australia’s NAIF. Current forecasts are under review in the light of the company’s recent (positive) Iron Valley earnings update.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net cash (A$m) 34
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 0.0 18.2 44.4
Relative* (2.4) 10.8 32.7
52-week high/low A$0.2/A$0.1
*% relative to local index
Key management
Simon Hodge CFO
Alwyn Vorster Managing Director