1) AGO is closer to port 2) BCI currently has a larger and better quality DSO resource over Atlas. 3) Both have MOU’s with FMG (They are in early which is very important. FMG wont be able to just give everyone access to their rail and port facilities) 4) AGO is further advanced. Very close to production start up. 5) BCI to become the next AGO
Capital Structure and Cash Positions.
Atlas
Shares - 231 million Options - 49 million
Are currently placing 50,000,000 shares at $2 a share to raise 100 million
Cash Position = 73 million
Add the additional 50 million shares..in total Atlas will have 281 million shares and 49 million options.
Fully diluted market cap is around 1.25 billion…but that will include 173 million in cash due to the additional 100 million cash that will be raised.
BCI are in a different stage atm so of course market cap and cash positions are much less.
Shares - 59.4 million Options - 4.3 million Fully Diluted 63.7
BCIron have 10 million in cash
Fully diluted market cap is just over 101 million…but that includes 10 million in cash.
Strip Ratios
AGO have a relatively low strip ratio (overall 1.8:1 waste:ore tonnes).
Not sure what the strip ratio is for BCI but it is better than AGO’s resource that’s for sure. BCI has multiple hits from surface and majority of their DSO resource is from the surface.
In conclusion both companies have good strip ratios but BCI win in this department.
Pilbara landholdings
Atlas owns 100% of a 9,000km2 prospective Pilbara landholding
BCI own 100% of 1500km2 and includes all of the Bonnie Creek palaeochannel system and most of the Shaw River and Nullagine River systems.
As you can see from the image below AGO have a LOT of land coverage but it is in areas that are not in close proximity to existing deposits and mines. This means nothing though..for all we know their licenses could be full of deposits..but based off proximity to deposits I believe BCI are closer to the hot spots where FMG/BHP and RIO are well established.
Exploration Targets
BCIron have an exploration target of between 200Mt (5m thick) and 600Mt (15m thick) of iron rich channel deposit within the pBC.
Link to announcement below. BCIron have not once made mention of their exploration targets since the prospectus.
ATLAS targets 120 TO 180 MT OF PILBARA IRON ORE Atlas Iron Limited (ASX:AGO) is pleased to report on continued exploration success from its tenements, located between 75 and 150 kilometres from Port Hedland in the Pilbara of Western Australia. Recent geological mapping and surface sampling has highlighted exploration targets with combined potential for 120 to 180 million tonnes of iron ore grading 57 to 60% Fe.
Confirmed Deposit. JORC compliant.
AGO have a resource of 23.3MT AT 57.3% FE BCI have a resource of 28.0Mt at 57.4% Fe
Also AGO have silica levels of 6.6 percent with aluminium at 1.7..whereas BCIron have reported silica levels of 2.98 and aluminium at 1.76.
BCIrons total CID resource is 47.2 Mt grading 53.6% Fe
Project Location.
Pardoo is closer to port. It is located approximately 50 km east of Port Hedland.
BCIron is a long way out..just above Fortescue Metals Cloud Break and Christmas Creek operations.
Infrastructure (The Key for BCIron)
Both companies have MOU’s established with FMG.
BCI’s MOU includes.
BC iron has entered into an MOU with Fortescue facilitating negotiation over bulk transport for its material, including potential Joint Venture or mine gate sale options. BCIron have an agreement for up to 5million tones per anum.
AGO’s MOU
Its pretty much the same except AGO have been allowed 1 million tones per anum from their pardoo project. 10 million tones per annum for their pardoo magnetite project And Up to 3 million tones per anum for their Abydos DSO Project. Im not sure if any of this has changed but it has been taken from the MOU announcement dated 11 June 2007.
Conclusion
BCI is severly undervalued when compared to its peers in the pilbara when you compare markets caps and deposit sizes. BCI is the next AGO. A simple conclusion.
BCI Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)