Mardie Salt & Potash Project – The Gas Pipeline Issue

So the ‘Gas Pipeline Issue’ (GPL) as it relates to BCI’s Mardie S&P Project has been long debated here on HC. Some comments on here have bordered from being informative and factual at one end, to fantasy and blatant untruths at the other.

Some here would have you believe this is THE ONLY issue that is important to the future of the BCI’s Mardie project. To be sure, there have been and will be many other issues that will arise and shareholders & investors need to realise that they should strive to be fully informed on all of these potential issues. Remember that this project also includes the construction of a port, so for example, the upcoming Geo-technical drilling for the Mardie port is another key area of risk to the company and was specifically highlighted at last November’s AGM by Alwyn Volster (MD).

Simply, the GPL’s run underwater from Barrow and Varanus Islands, offshore from the Mardie S&P Project, then reach land and dissect the Mardie pastoral lease, potentially splitting the lease in two and isolating the potential lower pond areas, which importantly are planned to include the salt water intake pumping station. The GPL’s pass through the Mardie tenement and meet up with the Dampier/Bunbury pipeline/s.

The current Mardie plan has Salt Ponds 2 and 3 either side of the GPL’s. Access and protection of the GPL’s are the key issues in light of the current plan for the project and specifically, Ponds 1, 2 & 3. Until this ‘issue’ is resolved, mining permits will not be granted by the WA Government. As a ‘workaround’ and to avoid delays whilst negotiations continues with the GPL owners, the potential trial pond has had to be relocated from Pond 2 (south of the GPL’s), to now be part of Pond 6 (north of the GPL’s).

So what does the company say about the GPL issue and are they confident they will be able to resolve it?

The GPL has been mentioned in three BCI announcements over the last few months –
22/1/2021 – Quarterly Activities Report
27/11/2020 – Access Agreement with Mardie Station Pastoralist
26/11/2020 – AGM Corporate Presentation (which includes maps showing the GPL’s on Page 18)

Of these, by far the most enlightening commentary for me came from the AGM presentation. A day or two after the AGM, which I had attended by registering ‘online’ and viewed it as a live but recorded webcast, I shared this post - https://hotcopper.com.au/posts/49206708/single - to HC summarising the AGM preso, in which Alwyn Vorster (MD) gave an excellent presentation on the state of the Mardie Project.

I came away from the AGM Meeting feeling very confident of the eventual success of the Mardie project. Now, I don’t know how many holders here on HC actually logged in to the AGM and/or have subsequently subscribed to the AGM webcast, but I would put it to everyone that had they done so, they would have a much clearer picture of this issue.

FYI, the logon for the AGM webcast should still be available for anyone interested to register at – https://webcast.boardroom.media/bci-minerals-limited/20201126/NaN5fa4d17e80b9820019908e51

Earlier today I reviewed the entire AGM webcast once again and made more detailed notes. Furthermore, for those not interested in the whole webcast, or who are time poor (I would strongly recommend the entire one hour webcast to ALL holders), I have donned my headphones and have typed out the two specific extracts from AV’s AGM presentation, word for word, where he specifically talks about the GPL’s.

The first comments by AV were to slide 18 – Tenure (Item 2), of the Corporate Presentation (mentioned above). His specific comments at the AGM follow –

“The second tenure is the very important Gas Pipeline. There is a gas pipeline easement that runs from the gas projects offshore and it connects with the Dampier/Bunbury gas pipeline that runs through here (referring to map). Ponds 2 and 3 straddles the gas pipeline. We need to find a design and agree a design that the GPLO, that will minimise and or avoid any risk to their assets. There is no question to us about it - we are absolutely committed to finding that solution - we have a dedicated team that continue to work on that design, to have that agreement in place by Feb/Mar next year (2021) so that it will not have an impact on our current project timeline.

At the moment, we are feeling confident that there is goodwill from all parties to try and come up with an agreement.”

The second comments by AV were at the end of the preso, during the Q&A session of the meeting. His specific comments to the Q&A follow –

Q - If BCI’s discussions on the Gas Pipe Line Easement Access do not proceed on schedule?
A - We are feeling very confident. We have a plan, we have a dedicated team working on the GPL easement, we are revisiting our DFS designs to actually create more space, more distance between our assets and the assets of the GPL owners. We believe there is a solid technical solution possible within the next 2-3 months. Once that has been agreed, the risk workshops have taken place with the GPL owners, we are confident we will get to an access agreement by March/April next year, and as we speak, we are confident it will not impact the actual project development timeline.

We, in parallel with that (process), as a fallback position if we cannot get access agreements signed, we are following the traditional process of the WA Warden’s Court, so we have submitted all of our applications to the Wardens Court, the GPL owners will respond to the Warden’s Court and there is a fixed timeline in the Wardens Court which shall lead to a determination. Again, we are using very experienced legal experts and the advice is that we are confident that we will be successful if we are forced down that path.We hope to avoid it, and we are currently working collaboratively with the GPL owners to achieve a solution.

So these words, straight from the horse’s mouth so to speak, are the FACTS of where BCI stood in late November. Nothing I’ve read, heard or been told since then has changed from those comments by AV at the AGM, and are what should be debated here on HC.

Therefore, as shown in the Corporate Preso and confirmed by AV, we should be expecting an announcement within the March/April timeline for the resolution of this issue.

Commentary -
My personal favorite ‘HC Fake News’ which has been firmly dismissed by AV’s comments, is the contention that BCI was being ‘dragged into court’ by the GPL owners over the issue. As you can now see above and / or hear from AV’s comments on the webcast, BCI INITIATED the Warden’s Court legal process a few years ago, as a formal ‘fallback’ to potentially failed, ‘in good faith’ negotiations with the GPL owners.

IMO, as shareholders, we should be grateful of this action, that the leadership team had the foresight to undertake the Warden’s Court process, knowing that it has a finite time process for resolution.

Other items worthy of discussion from the AGM Preso –

- The importance of the FEED process, including a specific BCI/GR Engineering team to develop an engineering solution for the GPL issues,
- The upcoming ‘workshops’ with the GPL owners,
- The confidence of AV and the team that they can achieve a satisfactory resolution to the GPL issue.

Fwiw, given the project profile, government funding and support, particularly in these difficult times, along with Kerry Stokes’ involvement as the major shareholder, I have great faith in the BCI team that they can resolve this issue.

Complaining about no resolution of this particular issue at this time, still 2 to 3 months away, when clearly as complex as it appears to be, is pure nonsense.

Regardless, be assured that if this issue is resolved, as night follows day, I’m sure another issue will pop up along the way to challenge BCI, and our collective patience!!

GLTAH.