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BCI Minerals board approves FID for Mardie potash project

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World Fertilizer,

BCI Minerals' board has made a final investment decision (FID) regarding development of the Mardie salt and potash project.

BCI completed a scoping study for Mardie in July 2017 which demonstrated Mardie's potential to be a Tier 1, globally significant salt asset. Since then, four further studies have been undertaken culminating in the Optimised Feasibility Study of April 2021 confirming this Tier 1 potential with projected annual EBITDA of ~AUS$260 million and a project NPV7 (ungeared, real) of more than AUS$1.6 billion.

The board’s decision will see Mardie become the first new solar salt operation in Western Australia in almost 25 years, and the first to produce salt and sulfate of potash (SOP) from seawater. The project has strong green credentials with the Indian Ocean the inexhaustible feedstock, and natural solar and wind energy providing 99% of the energy required to produce salt and SOP. Mardie’s sustainable production of agricultural fertilizer from salt waste, pollution prevention and materials recovery and re-use were key criteria in obtaining Green Commercial Loan Facilities as part of its AUS$740 million project finance debt package.

BCI’s Non-executive Chairman, Brian O’Donnell, said: “The BCI Board is pleased to see the Mardie Project reach this important milestone and we congratulate the BCI management team on delivering the project to this point. The final investment decision reflects our collective confidence that the project funding will be finalised in coming weeks, based on the expected approvals pathway and indications of interest received from existing shareholders, including Wroxby Pty Ltd, and potential new shareholders. The Mardie investment case is compelling with its large scale, low cost, and long operating life representing key attributes of a world class sustainable, multi-generational tier 1 asset.”

The AUS$740 million project finance debt package recently secured was the final criterion that provided confidence for the BCI Board to approve FID.

Other criteria integral to the BCI Board’s decision included approval and tenure-related milestones. Environmental approval is in its final stages, with the Western Australian Environmental Protection Authority (EPA) recommending to the WA Minister for Environment that the Mardie project can be implemented subject to certain conditions. Following the completion of the final public appeals process, the Minister will consult with other WA Government Departments before making a decision. BCI anticipates this will occur within the next month. Other regulatory and access approvals which are either complete or (in the view of the BCI Board) largely or acceptably de-risked include pastoralist access, gas pipeline easement access, port reserve creation, port leases with the Pilbara Ports Authority (PPA), and native title agreements.

Additional elements that support FID include confirmation from lenders’ independent technical expert reviews that project development strategies, operating plans, revenue and cost estimates are robust. Also fundamental to the Board decision were the successful production of market specification salt and SOP samples from pilot plant test work, and BCI obtaining signed creditworthy memoranda of understanding (MoUs) covering the first 3 years of salt and SOP production.

Completion of an embankment trial has confirmed the robustness of planned pond construction methodology and materials, and early works at the main seawater intake structure are also underway.

Expansion of the accommodation facilities will enable BCI to commence main construction as soon as final funding, approvals and tenure are secured.

In the near term, BCI expects to receive Part IV environmental approval for the initial project footprint in November 2021, and associated mining leases to be granted shortly thereafter. Equity raising activities will also commence during this period, aimed at enabling main construction to commence in early 2022.

BCI’s Managing Director, Alwyn Vorster said: “The FID milestone comes ten years after Mardie tenements were acquired for A$225,000 by BCI’s predecessor, Iron Ore Holdings. It is an endorsement from the Board for the results delivered by the BCI team and provides a mandate to finalise funding and subject to final statutory approvals, progress to main construction. We are confident that with the ongoing support of our Board, shareholders and other stakeholders, BCI is on the cusp of creating a unique, sustainable project in Western Australia.”

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