re: News: BC Iron continues to deliver on 201... The last...

re: News: BC Iron continues to deliver on 201... The last quarter showed cash on hand at $52.5M. However as of the 3rd of April the cash on hand was $62M with a ship sailing late March and that money not coming in until this quarter. There was (and still is) a chance that $80M will be hit by the end of this quarter. Unfortunately with the CFR62 dropping a little, it'll be hard to hit $80M even with the Aussie dollar dropping. IF 8th ships can set sail this quarter BCI WILL hit 3.5Mtpa and everyone at BCI is going like 'stink' to hit the 4th and last target. Even better will be if that 8th ship can get out early enough for the cash from that ship to hit this quarter. If it does it'll almost be a certainty that BCI WILL exceed $80M for the quarter. The latest guidance that I'm hearing is between $73M to $78M depending on the CFR62 and as said on the timing of the 8th ship (if it sails at all). If BCI can hit $77.5M for the quarter that'll obviously mean $25M for the quarter and that'll cause fund managers to take notice of BCI. Considering that BCI's current market cap is $270M, $25M for the quarter is remarkable because that figure isn't revenue but a NPAT figure. It'll also mean that BCI by the end of this quarter could be at a PER of 2.7!!! That kind of low PER for BCI wasn't expected until mid FY13.

A couple of other things.

I mentioned a figure of 75Mt in my last post. What I didn't mention is that's ONLY the proven resource amount. It doesn't include the probable resource awaiting to be tested which is currently as much as 19Mt (my estimate only) of DSO and BBSO which could place the total resource at 94Mt without further discoveries IF BCI can blend down to 54.5% Fe. Meaning: at a rate of 6Mtpa for the NIOJV it would equal a mine life of 16 years. Considering the average analyst is placing a NPV for BCI at around $3.60 a share @ 2.5Mtpa (50% NIOJV) for a 8 year mine life, what would be the NPV for a 16 year mine life @ 3Mtpa be? My gut is telling me that BCI will stockpile at a rate of 6Mtpa at the start of FY13 until the 2nd car dumper (train unloader) comes online at FMG during September 2012 at which time the NIOJV could be moving to a annualized rail/port rate of 7Mtpa thanks to FMG having about 20Mt of spare capacity through "The Pilbara Infrastructure PTY LTD."

Also the main reason that BCI could be able to export an average ore grade of 55% Fe is because BCI has a LOI of 12.3%. Almost no other miner can export or look at exporting a 55% Fe grade because their LOI wouldn't be high enough. And it's also the reason why BCI only needs to dry screen the lower grade ore and doesn't need any wet plants which is expensive. A wet plant is when you wash the clay out.