Following on from Gondwana's Iron Ore Exploration update...

Following on from Gondwana's Iron Ore Exploration update yesterday....
Gondwana's neighbour to the south of it's East Pilbara iron ore direct shipping project is BCI ( to the North East it's Atlas Iron and also has Fortescue project to the East). BCI board today announced approval of their feasibility study. A lot of good insight into the characteristics Gondwana may have as the locational similarities match. See the announcement for details.....some of the relevant sections listed below...

• Feasibility Study confirms technical and economic viability of the Nullagine Iron Ore
Project in the Pilbara
• Estimated capital expenditure for mine development of approximately A$43M with a
forecast operating cost of A$43/tonne over the life of mine
• Mine life of over 8 years with potential to be extended through mine camp and regional
exploration, and joint venture opportunities
• Maiden Ore Reserve of 36Mt at 56.9% - waste to ore ratio 1:1
• Pisolite fines product to be exported via Fortescue Metals Group rail and port
infrastructure
• Off-take agreement signed with Australian company Tennant Metals Pty Ltd
• First ore production targeted for Q2 2010
• Production at 3Mtpa targeted for Q4 2010 increasing subsequently to 5Mtpa
• Feasibility Study delivered to FMG for review

Australian iron ore Company BC Iron Limited (ASX: BCI; “BCI”) is pleased to announce the successful
completion of the Feasibility Study on the Company’s Nullagine Iron Ore Project, located in the
Pilbara Region of Western Australia.
The Study has confirmed that the Nullagine Project is an economically and technically robust direct
shipping ore (DSO) project, which will produce at an initial rate of 1.5 million tonnes per annum (Mtpa)
then ramp up to 3Mtpa then 5Mtpa as roads and infrastructure are upgraded.

BC Iron’s Feasibility Study was carried out to a ‘definitive’ standard and is based on a 1.5Mtpa start-up
and 3Mtpa ramp-up development schedule. The Nullagine Project hosts a Direct Shipping Ore (DSO)
resource of 50.7 Mt at 57% Fe (Appendix 2).

The deposits contain low contaminant levels, and occur at or near surface resulting in an overall waste
to ore ratio of 1.1.

FINANCIAL
Capital and operating costs for the Study were based on tender submissions for all facets of the
operation including infrastructure, mining, crushing and screening, and road haulage to FMG’s railhead.
Costs for rail haulage and port services are based on the Heads of Agreement (HOA) with FMG dated
June 5, 2009.
The results of the Study indicate that the Project will be exceptionally robust, with forecast average
operating costs over the life of mine of A$43 a tonne Free on Board (FOB). The operating costs include
mining, crushing and screening, truck haulage, rail haulage and ship loading.
Capital development costs for the initial 1.5Mtpa operation are estimated to be A$43 million, with
payback of capital expected to take less than two years from the start of production. The capital
development cost for the expansion to 3Mtpa is forecast to be A$17m and is expected to be funded
from operational cash flow.

BC Iron and Fortescue Metals Group (FMG) recently signed an agreement that will, upon acceptance of
the Feasibility Study by FMG, see them establish a joint venture to develop the Nullagine Joint Venture
(NJV).
Following the BC Iron Board’s endorsement, the Study will now be reviewed by FMG and if endorsed
by them, the joint venture will be established.

Once established, the Nullagine Joint Venture will use FMG’s subsidiary, The Pilbara Infrastructure Pty
Ltd (TPI), to provide rail haulage, port handling and ship loading facilities. The costs of these services
are incorporated in the operating costs detailed above, and are under firm contract.
Output is expected to rise to a minimum of 3 million tonnes per annum (Mtpa) once the dedicated heavy
haul road between the Nullagine mine site and the Chichester Operations is built and commissioned.
When TPI’s rail is extended to Christmas Creek and port capacity is increased, Nullagine’s production
could be increased to 5 Mtpa.
The NJV will benefit from synergies arising from the proximity to FMG’s operations, including access to
existing infrastructure, systems and facilities such as the David Forrest airstrip, which will expedite the
logistics of the new mine development. Cost benefits derived from this relationship have not been
accounted for in the Study and therefore provide a potential cost saving to the project.