Ann: Nullagine JV secures US$50 Million Project F, page-21

re: Ann: Nullagine JV secures US$50 Million P... Hi Pat,

You asked in relation to BCI waiting for Xmas Creek to come on-line and maybe not trucking to Cloud Break,

"Despite a delay, will this mean the trucking bit is easier?"

Well I thought it would have been as easy as looking at one of BCI's recent announcements to give you a quick reply. The funny thing is, there is absolutely nothing regarding this issue in any recent doc. Not even the 2009 annual report, mentions it on any of it's 60 pages. The closest the report says to trucking is this,

"During the June 2009 Quarter, a Heads of Agreement
was executed between BC Iron Nullagine Pty Ltd, a wholly
owned subsidiary of BC Iron Limited, and Chichester
Metals Pty Ltd, a wholly owned subsidiary of FMG.
Subsequent to this, it was formally agreed to enter into
the Nullagine Joint Venture with a view to fast tracking
construction and development at the Nullagine Iron Ore
Project. BC Iron expects it will be able to commence
production at Nullagine in mid 2010."

Nothing has been mentioned in any doc. about trucking to Cloud Break's rail head for a few months now. Management obviously decided to no longer publicize trucking to Cloud Break.

Because of this I'll need to rely on my memory, I apologize if this is wrong -

BCI were taking the most direct route (depending on terrain) from Bonnie Creek (BCI) to the purposed Christmas Creek rail head (FMG). The distance from leaving BCI's tennement to the purposed Xmas Creek rail head was approx. 30 Km. The plan was to then continue the road further on to Cloud Break's rail head (FMG)... As we know in order for BCI not to need to wait until Xmas came on-line ... The heavy haulage road that would extent from Xmas to Cloud Break would be approx.48 Km.

So I guess by waiting 6 months we will save making a 48 Km road. I don't know how easy the road would be to make, being basically flat desert I figure it can't be too hard. From reading current articles I'd say that FMG wouldn't have fast tracked Xmas Creek if it wasn't for the NJV. It kind of says that in the extract taken from the annual report written in a prior paragragh.

I'd have to think that Mike would see a further 6 month delay until production as serious. From a shareholders point of veiw, at best - Unfortunate but sensible when considering why, as worse - Totally unexceptable. It's no coincidence the subject wasn't talked about in any detail, in the lastest announcement.

I'd be surprised if Mike decided to suspended production due to a crumby 48 Km road. Let's say during that 6 month period BCI sold 1.5 Mt of DSO. Even if profit was only $20 a tonne (That's everything going against as scenario), that's still 30 Million dollars.

Me and my mates (That bits a lie, I don't have any mates) would be more then happy to jump on a few graders and grade a 38 Km road, and it wouldn't cost 30 Million Dollars.

Probably more importantly. It would be a major physiological blow for shareholders and potential investors that start up was to be suspended for half a year. (There would go BCI's credibility). The whole recent BCI story only makes sense if there was to be a merger/takeover between BCI and FMG. Then the 6 month suspension in mining wouldn't matter.

That's for posting the email surfa.

A great weekend to all, Chelkn. XXOO.