for those who missed the articleBC looks ahead as funds flood...

for those who missed the article

BC looks ahead as funds flood in
BY: PAUL GARVEY From: The Australian November 21, 2011 12:00AM


BC IRON managing director Mike Young says the company is considering diversifying into other commodities after being inundated with offers of more than $100 million in debt financing.

Mr Young, speaking to The Australian during a recent visit to Hong Kong, said the company had been looking seriously for acquisitions for more than a year as a means of moving beyond its flagship asset, the Nullagine iron ore joint venture with Fortescue Metals Group in the Pilbara region of Western Australia. With Nullagine starting to turn a profit after coming into production in February, Mr Young said the group had received numerous offers of debt financing and bonds.

"We're getting a lot of people coming through wanting to help us out with our next growth strategy and saying we'd like to give you the money. Big banks, little banks, American banks, Asian banks," Mr Young said.


"Hundreds of millions is available. I won't go into specifics because it'll be determined by what we do and how we want to grow, but it's triple digits. It's really interesting."

Fortescue late last month announced it had secured a further $US1.5 billion in debt through a bond issue offering a rate of 8.5 per cent to contribute to the group's Pilbara expansion plans.

Mr Young said the volatility of equity markets in recent years meant there were more debt funding and bond issues available to profitable mining businesses than in the past.

"People are a bit spooked by equity markets and are a bit unsure about the returns, whereas if you can get a 4 to 7 per cent yield on a bond, guaranteed, you're going to get a return," he said.

"We've got good margins notwithstanding the lower (iron ore) prices, so I think people would see us as low-risk."