Ann: BCI Achieves 5MT Export Milestone , page-16

Hi guys. Just a few thoughts on the possibility of an interim dividend.

It's fair to say that BCI management are eager to playdown the chances of an interim dividend. You'd have to think that the question would be posed to them regularly and they would rely on corporate etiquette 101 for a response. That response is as mentioned, playdown the chances of an interim didvidend. As Mike Young once said, he's doesn't like anyone, "pinning his hide to a statement". And we may well not see an interim didvdend but the reality in my opinion is this.

Statement's by management at present, regarding anything that relies on the spot price, (such as an interim dividend), will have very little to do with the reality of actual outcomes. NO responsible management can make a call on a future outcomes when the spot price is involved.

Not even management knows whether there will be an interem didvend, obviously that'll depend on the world econony and therefore the spot price. Management as always will state that if the cashflow is there each quarterly, that BCI's policy is to pay part of that cashflow out as a dividend.

I'm also convinced that Regent Pacific has a strong voice in regards to this matter. In my opinion, Regent Pacific put most of it's eggs into the BCI basket in the hope that that they could have taken BCI for it's own. The unsuccessful takeover attempt of BCI by Regent meant that they either bail out of BCI or make the most of what they have. I never did think that the precursor to the unsuccessful BCI bid by Regent was all about some sort of 'pump and dump'. I truely believe that Regent are in with BCI boots and all, and prehaps the idea of the pump and dump was part of strong negotiations between Regent and Palmary. Since it seems it was Palmary who shared that idea with a jorno and that then went to print. The fact that Regent continues to buy more BCI when they legally can, has gotta' convince the most strident critic of Regent, that they are here to stay and there was never the intention of a pump and dump.

Further more, I also believe that Regent does infact hold Institution shares in BCI, and that that could be as much as 17% of BCI. the two main parcels in my eyes being the first selloff by ALK, that being $4M shares (27/07/09). The other being the 2010 masive accumulation when some entity brought 12M shares (memory) through Citicorp and then placed those shares into a UBS AG account. It's worth noting that Regent also used Citicorp to buy their Bannerman shares.

My point is Regent could hold as much as 40% of BCI, that's a lot of shares and the only way Regent will see a return on their investment now that the takeover was unsuccessful, is through a dividend. I mentioned in an earlier post that the word on the grapevine 6 weeks before the announced 15 cent F/F dividend was a 10 cent dividend. My strong hunch is it was Regent who lent on BCI management to up that to 15 cents.

I recently did a forecast on my expected NPAT for BCI's FY13. The figure I came up with was 97 cents, provided that we don't see another crash in the CFR62 spot price. Mind you, BCI does live in a cocoon to a degree since it looks like most of the NIOJV DSO is being sold to HengHou and as such, BCI is subject to the agreed price between HengHou and BCI, and not the open market of the spot price. If BCI's strategy is to pay about 30% of it's cash backout as a fully franked didvidend. That 97 cents well and truely falls within the perimeters of two 15 cent F/F dividends.

So to cut my long and arduous story short -- I believe there will be a very good chance of another 15 cent fully franked dividend in probably May 2013. But ONLY if the spot price remains on average above $USD110t. And I'm not paying too much attention to what management says in the meantime about this issue. Because of course they will be playing it down, we now know Mike and Tony well enough to know that's their style. 100% professions who don't try and over promote BCI for a false short term gain in the SP.