valuation, page-7

Gidday Hong, Tils, Bnow, Blueroo, Surfa, et.al,

Thanks for the article Hong. You'd think a 40% increase in the benchmark would see the same type of hype in the IO sector as what we saw prior to the GFC.

Interesting thoughts Tils. Mike must be rethinking the end of 2010 start up to take advantage of current IO prices. I wonder if trucking to Cloud Break is once again a possibly. Once the wet season is finished by March 2010, we wouldn't need a all season road would we? By the beginning of the 2010 wet season, BCI's purpose built road close to Christmas Creek rail head should be up and running. BCI maybe able to attack the test pit at least. There's roughly 68,000 tonnes sitting there. What would be stopping us. BCI will have approvals by no later then March. We can sell at the spot price if there still isn't a off-take, although we do have a off-take with the un-named Hong Kong company. FMG should have the rail and port capacity. A couple of front end loaders, a couple of Atco's, a few trucks, a graded road and several men and women and we're off. Is it that simple? Probably not :-(

Bnow I'm surprised the benchmark is still to US Dollars. I suspect it's only a matter of time before we convert to the yuan. The believe whole issue is a little more complicated then we think. There's political issues at play here as well. I like the idea that the yaun could be the new currency, it should stabilize the price a little better.

Surfa I don't quite know how to treat the un-named Hong Kong company in the valuation. I also may have made a mistake by not placing the options in for the EPS. Although I have a feeling that you don't have to put the options in for a EPS until the options are excercised. Just another thought on my valuation of $4.53 for 2011. In some repects that could still be considered as conservative, when you take into account that 2011 is when BCI is still in it's transtitional stage of full production - 5Mtpa in 2012. So I'm expecting an added premium for the share price in 2011, for the anticipated rise in production in 2012, and the extra funds that will come with that. I guess the obvious thing that will determine all of this is whether China's demand for IO will still be there in 2012. India could take up any short fall from China by 2012.

Looking forward to a great year in 2010 for BCI. It's hard to believe that this time 12 months ago BCI was trading at 20 cents. The main concern was that BCI wouldn't get the project off the ground. We were still in the grips of the GFC. BCI was slowly running out of money, and possibly couldn't even capital raise for more funds. So the whole project would have been moth balled.

Since then we have raised our DSO from 28Mt to 51Mt. We have entered a JV with FMG for rail and port. We have successfully (some may argue) capital raised 22 Million Dollars thanks mainly to Regent. We have had capex paid for with project financing from an un-named Hong Kong company. We have had a better then expected test pit result, 13% better infact. BCI are looking forward to signing off on a big off-take agreement and BCI also looks forward to receiving all approvals now that FMG have offically signed the NJV by no later then March 2010.

The thing I'm looking forward to the most is the upcoming drilling results. BCI's Direct Shipping Ore is so good that BCI could if it wished to combine it with most of our remaining Channel Ore Deposit if it so wished to. BCI has spent most of it's time drilling the original Alkane Resources tenement at Bonnie Creek which could hold as much as 600Mt of CID depending on the thinkness of the ore. Further drilling results next year should give a more accurate reading. I believe some already know how good the results maybe, but don't say so because at this stage it's considered speculating. But I reckon Regent, Consoliated Minerials and BaoSteel do though.

Drilling in late 2007 at Shaw River has indicated there could be as much CID at Shaw River as what there is a Bonnie Creek. If you want an interesting read, go to BCI's web site, look under research and download the article titled,"Lonsec research - November 2007". I'm looking forward to what BCI uncovers at Shaw River. There is also the Nullagine River system waiting to be drilled. BCI also hope to have the time to drill the often forgotten resource of Bungaroo Creek. Which I believe Mike found whilst he was looking for possible Iron Ore deposits on Google Earth. That's real frontier stuff that you could until recently find a multi million dollar resource on Goggle Earth. Just shows how much iron ore the Pilbara does have and how lucky we are. If a deposit like Bungaroo Creek was discovered in China 2 years ago it would have already been dug up and used long ago.

Happy new year to everyone.