countdown to bonnie creek scoping study, page-4

I have worked out rough numbers for both a 3mtpa operation and 5mtpa operation. See below.

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3mtpa FMG Rail Haulage cost CAPEX of 45 million

Opex costs = $45 a tonne. I'm hoping they get it lower than this but I have gone with conservative figures

BCI will be extremely profitable off a CAPEX cost of 45 million AUD.

Obviously the key to success is a binding agreement but Twiggy has made it clear that this will happen in the near future.

Nullagine will be a crush and truck operation, developed at an estimated capital cost to BCI of about $A45m. (Based this off figures from AGO's scoping studys)

Operating costs would comprise mainly ore transport and handling. Standard rates suggests operating costs of $A45/t ore. Labour costs have gone up..other companies have based OPEX costs down to $35/per tonne which was completed by Atlas on their Abydos project.

The iron ore price I have used is 78USD a tonne. The price that Vale got..but no doubt RIO and BHP will lock in higher prices.


We know they are looking at a 3-5 mtpa DSO operation.

Numbers below

Three million Tonne operation

If we use the current price of ironore that was recently negotiated between chinese steel mills and Vale we get

78 USD = 83 AUD (This is extremely conservative considering smaller chinese steel mills have secured contracts with RIO for $95/tonne)

We then work out Revenue. Say we use an $83 AUD price for ironore even though it is expected to rise higher for ironore produced in Australia.

3000000 tonnes x $45 = 135 Million OPEX costs for a 3 million TPA Operation
Revenue = 3000000 x $83 = 249 Million
Profit = 249 – 135 (OPEX) = 114 million

Of course there is no Taxes etc placed on those figures and I would rather not attempt it but she will be profitable by a long way especially when she will only have a CAPEX of 45 million AUD.

Five million Tonne operation

Capex will increase but payback is going to be completed within one years worth of operation.

5000000 tonnes x $45 = 225 Million OPEX costs for a 5 million TPA Operation
Revenue = 5000000 x $83 = 415 Million
Profit = 415 – 225 (OPEX) = 190 million

As you can see if we are working off a 3 million TPA operation she will be pulling in roughly 114 million. From a 5 million TPA operation she will pull in roughly 190 million. NPAT im not sure on..but no Taxes are going to stop this operation from being a cash cow that’s for sure.

I cant work out exactly how much BCI will make because some costs have to go towards FMG for the use of their rail and port..plus with mine gate sales we dont know what percentage we will retain..all in all FMG will make this work well with BCI. If investors cant see value yet..they will eventually.

Im looking forward to the scoping study but based off some quick numbers I cant see why BCI wont rise. Maybe the only thing holding us back is the binding agreement with FMG to use rail and port facilities..Im sure this will be finalised soon though. Other IO juniors are running and I dont see any reason why BCI should be massively discounted to its peers.