BCI Minerals Limited

Good morning, everyone, and welcome. I'm David Boshoff, and with me is our CFO, Steve Fewster.

We're pleased to be joining you today for the September quarterly update. Before we get underway, I'd like to highlight that today's presentation should be read in conjunction with our September quarterly report.

This is now available on our website. As we move through today's session, if you have any questions, please feel free to add it to our live Q&A tab.

And then that's on the right-hand side of your screen, and we'll address those questions at the end of the session. It's been another strong quarter for BCI, marking 1 year of operations.

Switching on the pumps last year, since then, we have moved more than 185 gigaliters of seawater into our ponds, with continued progress on inundation of ponds 1 to 9, ahead of the 2025-2026 summer season. Our focus remains clear, ensuring a safe and sustainable operational ramp-up as we bring more assets online and close out the final construction packages.

What really stands out this quarter is how strongly our people and our partners have lived our values. A great example was our goal to achieve 90% pond inundation by the 1st of August.

I was actually on the site of the day that, that happened, and the team achieved it 2 days ahead of target. They really smashed that goal.

That's our we do what we say value in action, showing commitment, teamwork and pride as we are producing together. Now I'd like to take you through the highlights for the quarter.

In safety, we continue to strengthen key fatality prevention controls by completing 301 critical control verifications. We also performed 640 field leadership interactions and our total recordable frequency -- injury frequency rate reflects an ongoing focus on safe operations with a 12-month rolling average at 3.1.

By the end of September, the pond service inundation has reached 93%. We also introduced new technology that's giving us real-time insights into how our operations are performing.

This data is helping us to make smarter and faster decisions and plan more effectively for the future. I'll share a little bit more about that later.

Construction also continues to progress well. We are both on schedule and within budget, with the overall completion of the construction packages now sitting at 74%.

Finally, the commissioning of the pre-KTMS pilot crystallizers, which is an important step of our sulfate of potash progress has also progressed well. We are now in commissioning.

I'll now hand over to Steve to walk us through the financial highlights. Thank you, Steve.

Yes. Thanks, David.

With construction on budget, BCI remains in a strong financial position. During the quarter, we drew $110.9 million for our syndicated debt facility, and that brings total cash drawn to date to $347 million.

In July, we also received a deferred payment of $34.1 million from the sale of Iron Valley. I'll share more on the cash flow shortly.

But first, David will provide a more detailed update on our operations.

Thank you, Steve. I'd like now to start with a quick overview of the salt making process and how it's unfolding at Mardie.

Salt production starts with the intake of seawater from the Indian Ocean, which is then transferred through 9 evaporation ponds. Our operations team then carefully monitors the density in each of these ponds to ensure the brine is moved at just the right time.

This project is very important because it ensures that the impurities in seawater is precipitated ahead of the crystallizers. This enables the production of salt to our customers' specifications.

As the water temperatures rise, the natural evaporation process increases salinity of the seawater and gradually transforming that seawater into brine. Once the brine reaches the target density, which is typically between 1.21 and 1.22 kilograms per liter, it's pumped into the crystallizers where industrial grade salt begins to crystallize.

Once enough salt is crystallized, it's harvested. The harvested salt is then processed through our wash plant to remove the layers of impurities before it's being shipped to our customers via our Cape Preston West Port.

As you can see on the map, on the left of your screen, the ponds vary in size, all the way from pond 1 to 9. As I mentioned earlier, we've achieved 93% pond surface inundation with most of our ponds at or near capacity.

Our focus is now on reaching the target brine density. In particular, we're looking at pond 9 and to make sure that reaches the right density of brine before it's transferred to the crystallizers at the perfect time.

To support this process, we have developed a digital twin, which is a digital model, specifically designed for operations, and this allows us to monitor in real time and make data-driven decisions. The digital twin is now fully integrated into BCI's production planning process, combining real-time operational data from the primary seawater intake all the way through to ship loading while incorporating historical weather information.

The chart you can see there on the left of your screen has been created utilizing various weather scenarios from the digital twin and it illustrates the range of time of when the brine in pond 9 is forecasted to achieve the density. You can also see on the graph where the actual density of pond 9 is sitting at the end of September.

The chart here, you can see, illustrates that range. And then this analysis also shows that target density is likely to be achieved during the period between January and March, and this obviously will depend on the actual weather conditions we experienced in this upcoming summer.

Importantly, we continue to work towards our target of having our first production salt on ship in the December 2026 quarter. Other operational activities during the quarter included the commissioning of the Transfer Station at 6/7, also the ongoing fabrication of our salt harvester herein Perth, and the development of the Mardie salt operating system.

We continue to make good progress towards our construction milestones, specifically engineering and design of the salt wash plant has reached 60% completion. Earthworks have also commenced along with other orders placed for major long-lead items.

These long-lead items include centrifuge, elutriator, dewatering screen, also the screw classifier. The committed cost for the salt wash plant now stands at 30% with the remaining costs to be committed over the coming two quarters.

The primary and secondary salt crystallizer were also completed, marking the conclusion of the majority of the bulk earthworks, as well as pond and crystallizing infrastructure required to support full-scale production. In April '25, we commenced commissioning the first crystallizers with seawater to test their permeability and help inform the optimal sealing solution.

Sealing the crystallizers is a critical step prior to transferring valuable high-density brine from pond 9, as I described earlier. The results from these trials, the seawater trials confirmed that the use of liners as a superior solution to sealing crystallizers because firstly, it creates a more predictable harvesting environment; and secondly, it eliminates seepage, thereby creating additional ramp-up tonnes in the early years of production.

Consequently, BCI is implementing a program, sealing the crystallizers where this cost expected to be fully funded within the $1.443 billion salt-first budget. Sealing of the crystallizer trials will commence in the current quarter with the first crystallizer scheduled to be ready to receive brine from February 2026 onwards.

The sealing of the remaining trains is planned to occur as required to meet our production ramp-up schedule. Also now the marine package of the Cape Preston West Port has reached 93% completion, and the environmental approval for the offshore placement of dredge spoil has transitioned into the next phase with both the state -- with the state and the Commonwealth regulators.

Steve will take us now through the financial highlights. Steve?

Thanks, David. Total construction now sits at just over $1 billion, having spent $67 million this quarter.

The largest packages of work remaining include the dredging, the crystallizer sealing and the salt wash plant. Other than the long-lead items that have been ordered for the salt wash plant, these packages will be funded from the $386 million we had in uncommitted funds.

From the engineering design work on the salt wash plant, and the procurement of materials to date, we are confident the salt wash plant will come in on target and to schedule. With dredging, the tenders closed last week and based on our early analysis of this package, the costs look to be aligned with our budget.

And lastly, this will be placed in order for the first package of the crystallized aligners, with the cost of this order being in line with our forecast. The progress being made on these three major construction areas supports our confidence of remaining on budget.

Looking forward to the next quarter, as we prepare the site for the arrival of the materials for the salt wash plant and the crystallized aligning, construction activity at Mardie will be lower than recent quarters. Both of these work fronts will be in full swing during the March 2026 quarter, and dredging will follow in April 2026.

These activities align with our construction schedule and remain on track to support our FSOS target. As mentioned earlier, we drew $110.9 million from our syndicated debt facility during the quarter.

At the end of the quarter, BCI had available liquidity totaling $676 million, with approximately $441 million required to complete construction, we remain fully funded to complete the construction work as well as having sufficient working capital to be able to operate through the ramp-up. As we previously shared, our drawdown process runs on a 45-day cycle.

Prior to each drawdown, we are required to undertake a project cost reconciliation and provide this in conjunction with an opinion from the lender's independent technical expert or ITE. The ITE's opinion confirms to lenders that BCI remains fully funded to complete construction, as well as having sufficient working capital.

To date, we have successfully completed 6 drawdowns totaling $347 million. I will now provide an overview of what we're seeing in the salt market.

You'll see the CFR prices that we quote in the quarter release are based on the price of salt as well as the weighted average cost of freight to get that salt to the customers' ports in Indonesia, Japan, Korea, Taiwan and the Philippines. As such, freight is a key component of the CFR price.

The factors affecting the cost of freight include the size of the ship and the distance from the supplier to the customer's port. During the June '25 quarter, Indonesia imported proportionately more volume than other buying countries when compared to the March 2025 quarter.

With the lower shipping distance from Australia to Indonesia, this reduced the weighted average freight cost and hence the CFR cost in the June quarter was $5 lower. On an FOB basis or the price that the supplier receives for their salt, the Asian market remains relatively stable.

As we've previously shared, the Cape Preston West Port is a strategically valuable asset for BCI and the region. This is a multi-user port that is being designed to export approximately 20 million tonnes per annum of bulk commodities such as salt, SOP and iron ore.

At nameplate capacity, Mardie's SOP and salt operational needs are around 5.5 million tonnes per annum. This gives us surplus capacity of around 14.5 million tonnes per annum.

So this infrastructure could be part of the solution for some of the components in the West Pilbara region who don't have access to a port. By the end of September, construction reached key milestones marked by the completion of all the heavy lifts.

This included putting the ship loading tower in place, installing a small boat landing, as well as subsequent demobilization of the jack-up barge. Works on the electrical and mechanical installation are now well advanced.

Pleasingly, BCI continues to receive inquiries from potential third-party users of this facility in the region.

Thanks, Steve. The SOP part of our production stream is a key byproduct of our salt production, and it's a really important revenue stream for BCI in the future.

This quarter we visited several potash producers in China and India to gather insights and benchmark their operating practices. The learnings from these visits are now being incorporated into our pilot plant design.

We successfully commissioned the Pre-KTMS trial crystallizers as you can see on the screen on the left. And we are now operating these in line with expectations.

Operations for the pilot plant construction are also progressing well, and we will commence that work early next quarter. While our focus remains on safety and ramping up our operations safely and completing construction, we continue to prioritize environmental stewardship.

During the quarter, we delivered a wide range of environmental monitoring activities in collaboration with specialist consultants and our traditional owners. We also hosted our second implementation committee meeting with the Wirrawandi Aboriginal Corporation and commenced work on an updated Indigenous engagement strategy.

On the community front, BCI visited Karratha Senior High School to support the positive behavior support program and the student achievement through the BCI High Value Rewards initiative. We also marked our first presence at the Resources Technology Showcase, and this showcase is Western Australia's premier mining innovation event.

As we close this quarter, we do so by consistently applying our values in doing what we said we will do. We are well positioned to respond to forecast salt supply shortfalls in face of rising global demand while creating sustainable multigenerational benefits for our shareholders, local community and also for the broader Australian economy.

This brings us to the end of the presentation. If you've got any questions, please add them to the Q&A tab on the left of your screen -- I'm sorry, on the right side of your screen, and we'll go to questions now.

Thank you.

David, can you talk to the remaining packages of construction yet to be committed? Given the salt wash plant design is still not complete, when will you be in a position to award that work and cost to complete known?

Thank you. So yes, the salt wash plant, as I mentioned, is 60% through design.

The natural process of design would start with the earthworks design, the footings, the structure itself. And then as you move through the components that you add to that wash plant, and then eventually the electrical and engineering -- sorry, electrical and instrumentation.

So the work that's complete is all our structural design, all the design for the selection of our components, as I mentioned earlier, the long-lead items. What is currently underway is piping, electrical and instrumentation, which is naturally to the back end of your process.

We have already locked in and ordered a long-lead items, which means that cost is in actual cost. We've also commenced our earthworks and we are about to award the concrete and footing packages at the end of this month, so in November.

The next packages will be electrical and instrumentation. And I'm expecting that will still be early in the next year.

So probably around February with us then commissioning in salt wash plant in September of next year.

Thank you. Steve, you mentioned in the quarterly report that the upcoming quarter will be slower in terms of construction progress on site.

Does this put FSOS timing at risk?

Yes. We were actually going to have a slow quarter this quarter.

We're coming off the back of almost completing the jetties, the jetties at 93%. The ponds are now constructed, watering the plants, all the bulk earthworks, the crystallizers are complete, this pump stage -- stations that are closing in on completion for the crystallizers.

So everything has -- is tracking to schedule. And we were always going to have this natural -- naturally -- natural quieter quarter this quarter.

So for many of the reasons that David just spoke about, the schedule is always aligned to have the design work for the salt wash plant now. Dredging was always going to commence in April next year because of the dredge we know in the region.

So at this stage there's nothing we see on the construction front. That puts it on a critical path for FSOS, which we're targeting at the back end of next year.

Thank you. David, your decision to align the crystallizers, can you outline the cost of procuring and installing the liners, what the timing is and what the catalyst was for that decision?

Yes. I think this is important for me to highlight a couple of things.

So when I started with BCI, we operate with a -- what I would call a static model. So basically a model that requires manual inputs to be changed.

And it took us about a week to 1.5 weeks to run different scenarios. Since then, I mentioned, we've done the digital twin.

So the digital twin is a fully modeled replica of our operations, it includes our size of our ponds, the amount of water we can intake, our actual weather data. What that enabled us to do is do one scenario in a couple of hours.

So if I went to Steve and I ask him, what if we do this? What's the impact to NPV?

What if we change that? How does it impact our cash flow in the future?

It was quite hard and arduous process to determine that with a digital twin that happens in a couple of hours. So one of the things that we've looked at very carefully is what is the impact of the planned and forecasted seepage for the crystallizers on our revenue in the future.

And is there a better way to do it. And so the digital twin then enabled us to run the scenario with ceiling and without ceiling.

And then, of course, we included our forecast cost for the sealing in that model. And the NPV for sealing those crystallizers vastly superior than not doing that.

So that then allowed us to say, well, we have to -- that's a better solution for shareholders. And we commenced with exploring exactly how we'll do it from a cost perspective and from a timing perspective.

This then led us to the decision to take to the Board and that might then -- I guess, enabled us then to commence that process. So we expect the sealing prices to happen procurement has commenced.

So sealing of the first train will happen between now and February. And then February is going to expect, again, the digital twin giving us this clarity.

February, we expect the water in pond 9 to be ready to be transferred into the first crystallizer. So we're back -- we've worked back from that date to ensure the first train is ready to receive brine.

And then the subsequent trains are then scheduled in line with when that brine volume will come from pond 9. So I see this as a great opportunity.

I think the digital twin has improved our insights in how to maximize productivity and that then leads to smarter decisions for the future. I would just probably just add 1 thing -- thanks, Steve.

Just 1 quick, I guess, in closure before I hand over to Steve, is the good work the team has done so far has enabled us to have headroom. And Steve will be able to share a little bit more detail on that.

Yes. Obviously, I was going to emphasize that point.

We've got an outstanding projects team and through getting the project to 74%, they're discipline around cost management, cost control, thinking -- digging through really effective solutions has been we've been able to build a buffer in our budget. And so when things -- when we look at opportunities to maximize the return to shareholders, as we have done with aligning of the crystallizers, we've been able to do that within that funding envelope, within that capital budget of $1.443 billion.

So I think full credit goes to that project team and that discipline and managing that budget tightly.

David, can you say a little bit more -- explain a bit more about the water flow from pond 1 to pond 9 is a question around, does the pond get empty 10% and then replenish?

Yes. So the -- I think it's important for me to just step through that.

The densities between ponds are managed based on a very specific market density at its transition between ponds. So the ponds are maintained at the exact same level throughout its production cycle.

What happens is you continue to transfer, call it fresher water or more -- less saline water from the salt into the pond and monitor the density. And when it gets to the required operating density, some of that water is then transferred into the next pond.

At the same time, that water has been transferred is replenished from the pond just before. So imagine a total system where all the ponds are staying roughly at the same height through average operating period, but the density is fluctuating a little bit up, a little bit down based on that transition -- continuous transition over time.

What that allows us then is to have a continuous stream of highly saturated brine in pond 9, that then feeds the crystallizers. Where the process is more stage -- where process where they empty and fill is in the crystallizers, so the crystallizers continuously filled until we have enough harvestable product.

And then that crystallizer will be drained to make it ready so you can harvest that product, while the other crystallizers are then crystallized, and that goes into a cycle when you rotate that through your different crystallizers in the production process.

Thank you. Steve, can you comment on what the possible revenue is per year for the port for non-salt products?

Look, we haven't set a unit price at this stage. We have looked at other ports in the region.

So bulk ports do publish their rates. And I think we can look to those rates and probably to the south of us at Ashburton Port is probably best -- is the best comparison to what Cape Preston West Port is as compared to, say, Port Hedland.

And what you'll see in the published rates that it's about $9.10 per tonne that Ashburton Port is charging. Now part of the cost of -- or part of how your price will be built up will be based on what's the capital expenditure and what's an appropriate return.

That is guided if you want to go and look at the Ashburton Port is, that's probably as good an indication at this stage as anything else.

Excellent. David, given the seepage in the crystallizers that you've talked about, will you need to live pond 9?

Is this why it isn't full?

No. So that -- yes, I'll clarify that.

I think important point. So pond 9 is the last one that was finished.

You might recall from the previous quarter. We've only just finished the -- we call it the port road or the PPA road, which is the northern boundary of pond 9.

And that part is only -- the crystallizer only -- sorry, that pond is, I mean, just being commenced, filled in the last couple of months, and is steadily rising. And you also noticed in the picture that I shared earlier, pond 9 is tiny compared to some of the other ponds.

So that pond, I'm expecting in the next 3 months will continue to fill. Obviously, to the seepage question, we've been monitoring the seepage in the ponds.

And I'm happy to share with you that the -- any seepage in those ponds, particularly in the ones we filled at the beginning of -- or about 12 months ago, the seepage has completely stabilized in those ponds. So the natural prices of where I mentioned the impurity is dropping out, my expectation is when pond 9 gets to its required density and those natural impurities drop out, then that will continue to, I guess, get that pond into the right production capacity and allow it to operate as it should.

And my final point on that would be is that these ponds are based in mudflats. So mudflats, of course, creates a natural boundary to the seepage of those ponds.

Thank you. Steve, assuming you go ahead with producing SOP, will this be funded by debt or equity?

And what would the timing and magnitude of the capital be that's required?

Yes. So we frequently say the CapEx is probably somewhere between $150 million and $200 million, and the work that the SOP team will help inform the ultimate value of that construction.

In terms of the funding, by the time we complete the pilot trials, select a design and they need to fund that construction, we would fully expect that the salt business would be generating free cash flow. Our business that generates free cash flow has a wide range of options to be able to fund that.

So I think we'll be -- we'll have very, very flexible options at the time when we need that funding.

Great. Thank you.

David, can you comment on the status of the dredging sea dumping approvals and how they are tracking?

Yes, absolutely. So the -- I mentioned in my -- one of my remarks that we've progressed to the next stage.

So last week, we had the EPA Board meeting for the state approval. We're currently in the consultation phase.

So we received our draft conditions that included sea dumping among other tweaks in our conditions. The team is expected to respond to that today.

Then that is still on track to receive our approval from the state for those conditions well ahead of our April commencement date for dredging that we spoke about earlier. On the federal side, we're also in the conditions consult period.

That condition has currently been drafted, and we expect those provisions to be with us somewhere next month. And again, that team is tracking on time ahead of that April due date.

So I'm pleased to say that those things are progressing, and we will have to continue to work hard that we deliver on those approvals as we did for the groundwater management plan and the other approvals in the past.

Thank you, David. So at what level of strength has the pier jetty being constructed to withstand what level of a cyclone?

Yes. Our design specifications for the port has been a one in 500-year rain event.

That, of course, is quite superior to many other ports, but is the design requirements that we've set for the construction contractor. So one in 500-year will certainly stand, I guess, the test of time.

Also, it can also do a category 5 cyclone. So there are some tie down procedures for the conveyor belt itself, but the structure is designed for voluntarily above that.

Thank you. That concludes our questions.

Thank you, everyone, and we'll see you next quarter.

Thank you.